Scottish Investment Trust let down by US underweight and Oil exposure

Over the year to the end of October 2014 Scottish Investment Trust generated a return of 1% on net assets – in-line with the return on the FTSE All-Share Index over that period but well behind the 8.8% return posted by the FTSE All World Index (a large proportion of SCIN’s assets are invested overseas). he dividend was increased from 11.6p to 12p. last year there was also a 1.8p special dividend – this was not repeated this year.

The discount was more or less flat over the year so the return to shareholders was 1.4%.

The manager’s report notes that the fund was underweight the US market relative to global indices and this dragged down relative returns as that market posted a 16.7% return for the period. The largest positive contribution to performance came from the fund’s holding in UnitedHealth, a US health insurer. He says other healthcare related stocks that did well included Coloplast, Hikma Pharmaceuticals, Aspen Pharmacare and Biogen Idec.

In the technology sector, Chinese internet holdings, Tencent and Baidu, performed well as did Apple and NXP Semiconductors. They lost money though on Russian-based Mail.Ru, as the Russian market fell in value prompted by Russian involvement in Crimea and Ukraine, and on LinkedIn.

In Consumer Goods, Pandora, the Danish retailer of charms and bracelets, and Associated British Foods both did well as did UK house builder, Persimmon. This was offset by a loss from a holding in Chinese car manufacturer Great Wall Motor.

In Consumer Services, Comcast, the US broadcasting and cable giant, performed well but this was offset by a loss realised in Chinese-based New Oriental Education and Technology. Financials were flat overall – gains in US Bancorp, Capital One Financial, British Land and insurer Standard Life  were set against losses on Banco do Brasil, BNP Paribas and  Sumitomo Mitsui Financial Group – resulting in a net gain of £0.8m.

The biggest hit to the portfolio came from their Oil & Gas exposure but, collectively, Industrials holdings also lost them money – the report mentions holdings in Spectris, Dürr, a Brazilian infrastructure operator, CCR, and Serco in this regard.

SCIN : Scottish Investment Trust let down by US underweight and Oil exposure

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