Scottish Mortgage set for FTSE100 debut

Scottish Mortgage Investment Trust is to enter the FTSE100 for the first time.

The Trust, which is the UK’s largest conventional investment trust with gross assets in excess of £5 billion as at 28 February 2017, is managed by Edinburgh-based investment management partnership Baillie Gifford.

The announcement means that SMIT will enter the blue-chip FTSE100 index, with effect from the close of the market on 17 March 2017, for the first time since its inception in 1909.

In recognition of its growth, the trust will cut its annual management fee from its current ongoing charge of 0.45 per cent to a tiered fee structure.

From 1 April, the AMC will continue to be 0.3 per cent on the first £4 billion of AUM, dropping to 0.25 per cent on higher amounts.

Baillie Gifford partner and co-manager of the trust James Anderson, said: “We’re thrilled by the progress over the decade since Scottish Mortgage became a genuinely global trust. The opportunities ahead are compelling but we need to keep improving and cutting costs is a vital and underestimated part of this process.”

Chairman John Scott said: “Admittance to the FTSE100 is a milestone for the company. It reflects the trust’s strong investment performance over the past 10 years, in addition to which our assets have grown on the back of the issuance from treasury of over 130 million shares in the past three years. This is testament to the success of our Managers’ high conviction approach in owning what we consider to be the world’s most exciting growth businesses. For the trust it brings increased visibility, and for shareholders looking to buy or sell it offers increased liquidity.

“Our size also brings economies of scale; I am delighted that we have agreed a reduction in the management fee. The flat rate of 0.3 per cent per annum which we have been paying was already amongst the lowest in the investment trust sector but I am delighted that, henceforth, the top tier of our assets will attract a fee of 0.25 per cent per annum.”