Forum Home» Savings & Investments

Scottish Mortgage Trust - Bright Future? - Page 2

New Post Advanced Search
Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.

Scottish Mortgage Trust - Bright Future?

edited 30 November -1 at 12:00AM in Savings & Investments
55 replies 7.3K views
2456

Replies

  • DrSynDrSyn Forumite
    826 posts
    Ninth Anniversary 500 Posts
    ✭✭✭
    Alz1986

    Your OP gives me the impression you are new to investing. That you chose SMT because others said it is a good trust. That before investing you did not consider that:-

    Market values can go up and down by large amounts.

    The long term nature of investing (10 years or more).

    The risks involved in investing,means that you may get back less than you put in. Or just how much risk you where willing to take.

    Your SMT, is an Investment Trust, so can therefore go to a discount or premium, has a concentrated portfolio of 68 holdings and is actively managed. Comparing SMT to an index, might be thought of as comparing apples with oranges.

    I suggest you look at these before decide what to do, they may be of help and interest:-

    http://www.kroijer.com/

    https://www.ifa.com/indexfundsthemovie/
  • Alz1986Alz1986 Forumite
    121 posts
    100 Posts Second Anniversary
    AnotherJoe wrote: »
    The FAANGS are down hence SMT is. Tesla also down but I suspect will be back up again this year there's been a lot of FUD against it from people with vested interests but it's share price would appear to be underpinned by a potential Apple takeover or massive investment plus its sales will likely be big this Q and bump the shares back up. Not that I'm bold enough to buy but I think the odds favour a renaissance in their share price.
    However I have to ask why did you buy into SMT? Given it's high tech constituents it was always going to be a roller coaster. If you can't stomach the ride or don't have confidence in tech then sell up and buy something else.


    Amazon and Netflix are the 2 FAANG stocks in its holdings, and I think the interesting thing is that the Nasdaq 100 (EQQQ Powershares) which hold them all and is very tech heavy had exceeded its all time high recently before coming down again - which makes me a bit dissapointed in SMT.
  • Filo25Filo25 Forumite
    2K posts
    Part of the Furniture 1,000 Posts Name Dropper
    ✭✭✭✭
    Alz1986 wrote: »
    Amazon and Netflix are the 2 FAANG stocks in its holdings, and I think the interesting thing is that the Nasdaq 100 (EQQQ Powershares) which hold them all and is very tech heavy had exceeded its all time high recently before coming down again - which makes me a bit dissapointed in SMT.

    No active fund will beat its benchmark all the time, if you are going to be disappointed every time that happens, then I would agree passive investment is probably the best way forward, if it is more a case of the overall decline worrying you then you are investing way beyond your risk tolerance.

    In terms of SMT's performance I would imagine the significant holding in Tesla hasn't helped, but that is the kind of stock SMT will hold, they invest in companies they think have the potential to make massive returns, but some will fall by the wayside (and Tesla certainly could be one of those)
  • Alz1986Alz1986 Forumite
    121 posts
    100 Posts Second Anniversary
    Aminatidi wrote: »
    Tend to agree.

    When I first started investing which was only a year or so back I put a small amount in SMT and promptly freaked out when it dropped 5-10% and sold.

    One of many lessons I've learned in a short time.

    If I were the OP I'd be looking at my tolerance around risk and volatility as SMT will likely make you money over the long term but I wouldn't want to put a bet on how it would act over the short term.



    cloud_dog wrote: »
    OP, don't take this the wrong way but I don't believe there is an issue with SMT but you have a perception/understanding problem.

    The fund is highly concentrated and is a high risk fund due to the investments and concentrated nature. I hold it am am happy to continue to do so.

    You should consider this as a valuable lesson in better understanding your own risk tollerance level.


    Though I do agree for first time investors SMT is really not a suitable fund - which is the advice I give out myself ...(I need to practice what I preach!).



    I was aware of its volatility, hence why I held onto it even though it had plunged 13%+ from my entry throughout the year. I am more concerned it doesnt appear to be making up much ground when the markets were rallying.



    Its not just indexes, even other BG IT's e.g. Monks have recovered well.


    They have also increased their unquoted/ unlisted holdings upto 25% ...



    Having said all that, I am becoming worried at their strategy, especially with all these "good relationships" which appear to have dragged the value down instead of up, but history is on the managers side so I'll hold onto it for the time being and re-assess later in the year.
  • Filo25Filo25 Forumite
    2K posts
    Part of the Furniture 1,000 Posts Name Dropper
    ✭✭✭✭
    On the other hand I quite like the fact that it holds a lot of unquoted stock (which I would struggle to access otherwise), a lot of opportunities in that area, but equally it isn't something I would be comfortable with as a core holding
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • DrSynDrSyn Forumite
    826 posts
    Ninth Anniversary 500 Posts
    ✭✭✭
    Alz1986 wrote: »
    Having said all that, I am becoming worried at their strategy, especially with all these "good relationships" which appear to have dragged the value down instead of up, but history is on the managers side so I'll hold onto it for the time being and re-assess later in the year.

    This sounds as if you have become attached to the share and are trying to find reasons to keep it, instead of letting it go.

    History of a manager as we have seen recently is not a good guide for keeping a share.

    Bill Miller beat his index (S&P 500) for 15 years. Things changed he did not and all 15 years gains where wiped out.

    SMT share price in the future may be better, worse or the same as now.

    No one should invest above their risk tolerance. If it is worrying you so much, sell it and move on.
  • cloud_dogcloud_dog Forumite
    5.3K posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    Alz1986 wrote: »
    Amazon and Netflix are the 2 FAANG stocks in its holdings, and I think the interesting thing is that the Nasdaq 100 (EQQQ Powershares) which hold them all and is very tech heavy had exceeded its all time high recently before coming down again - which makes me a bit dissapointed in SMT.
    I'm not defending the recent performance of SMT but I think you are showing your lack of understanding. Firstly, SMT does not track the above index (it tracks the FTSE AllWorld Index (in sterling terms)) but, that aside it has pretty much done well in comparing it against the Powershares EQQQ:

    SMT%20EQQQ.JPG?dl=1

    In late 2017 / early 2018 it beat EQQQ significantly. In 2019 it has not exceeded EQQQ but it fell significantly more sharply / further in late 2018.

    I am unsure why you don't just purchase Powershares EQQQ?
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • SystemSystem
    177.8K posts
    10,000 Posts Name Dropper
    ✭✭✭✭✭✭
    cloud_dog wrote: »
    I'm not defending the recent performance of SMT but I think you are showing your lack of understanding. Firstly, SMT does not track the above index (it tracks the FTSE AllWorld Index (in sterling terms)) but, that aside it has pretty much done well in comparing it against the Powershares EQQQ:

    SMT%20EQQQ.JPG?dl=1

    In late 2017 / early 2018 it beat EQQQ significantly. In 2019 it has not exceeded EQQQ but it fell significantly more sharply / further in late 2018.

    I am unsure why you don't just purchase Powershares EQQQ?
    The SMT does not track any index, it uses the the FTSE All-World Index as a benchmark, which is different to tracking the index.
    "The Company aims to achieve a greater return than the FTSE All-World Index (in sterling terms) over a five year rolling period or longer. This benchmark is a reference point for considering performance and emphatically is not a portfolio construction tool. The portfolio does not set out to reproduce the index and there will be periods when performance diverges significantly from the benchmark."
  • cloud_dogcloud_dog Forumite
    5.3K posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    Yes, I rushed my post a little.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • StellaNStellaN Forumite
    347 posts
    Third Anniversary 100 Posts
    ✭✭
    I hold SMT in my ISA but not as a core holding. Yes, it is quite volatile, however I am a long term investor rather than a trader so I am happy to retain SMT in my portfolio.
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support