Edison review on The Scottish Investment Trust

London, UK, 1 October 2019

Edison issues review on The Scottish Investment Trust (SCIN)

The Scottish Investment Trust (SCIN) seeks to ignore the 'madness of crowds' and invest in deeply unloved areas of the global stock market, where recovery potential has been overlooked by the majority of investors. Absolute returns have been strong year to date (1 January to 31 August 2019), with share price and NAV total returns of more than 10%. However, performance has lagged the strong rebound in global indices, which have been driven by a relatively narrow range of highly valued stocks. Manager Alasdair McKinnon is backing areas including gold miners (the outlook for gold is positive given lax monetary and fiscal policy against a worsening economic backdrop, yet miners have remained out of favour) and telecoms, which offer limited economic sensitivity and attractive dividend yields.

At 27 September 2019, SCIN's shares traded at an 8.7% discount to cum-fair NAV. An active buyback policy seeks to limit the discount at c 9.0%, and its effectiveness is evident in average discounts of 9.0% and 9.3% over one and three years. Dividends are paid quarterly and the shares currently have a yield of 3.0% (including the FY18 special dividend).

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