After an incredible 2020, Scottish Mortgage Investment Trust (London Stock Exchange: SMT) The current selling price is about 1,200 pence, well below the historical high of 1,415 pence in February. I think the investment trust managed by Baillie Gifford offers me opportunities at a lower price.
SMT’s goal is to become “Actively managed low-cost investment trust that invests in high-conviction global company portfolios with the goal of maximizing shareholder returns in the long-term Term”, according to the April 2021 fact sheet. Long-term is the key. Therefore, I am not worried about the short-term fluctuations it may be experiencing at the moment. The trust measures performance within five years. As a long-term investor, I am very happy. Just look at the 100% stock price increase in 2020 to see the returns that SMT can provide.
So why would I like it for a long time? When looking at the top holdings, I saw huge potential.As of April 2021, the portfolio includes Tencent, Weilai, with AmazonThese companies have opened up my path to the ever-evolving technology industry. With the current technology sell-off, I think the risk exposure that SMT can provide to the industry is a good way to further diversify my portfolio, and the price is reasonable.
I like the way managers think ahead. SMT decided to put it in Tesla Earlier this year, banks profited before the technology sell-off. A move like this gives me full confidence in actively managing my investment portfolio in the future.
Risks of Scottish Mortgage Investment Trust
In summary, I know the potential risks brought by SMT.First, the fund manager James Anderson intends to Step down April 2022. After the first rise in trust, this may call into question future performance. After all, as early as 2013, when Tesla’s stock price was $6, Anderson was the key to deciding to invest in Tesla. Will his sharp vision become a loss in the next few years?
In addition, due to the current technology sell-off (my fool Dylan Hood (Fool Dylan Hood) Explained well) Is displayed. As investor confidence continues to decline, SMT’s stock price may also fall.
The news about James Anderson could be a blow to investors. During his tenure as a fund manager, he achieved incredible returns. Most importantly, the trust has been unstable recently.
However, as a long-term investor, I did not shrink from it. SMT has a good track record and I think the current stock price is a good opportunity to buy.
The new historical high in February may just be the beginning of the further decline that investors may see. This is why I am buying more shares now.
Charlie Keough owns shares in the Scottish Mortgage Investment Trust and NIO. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares in Amazon, NIO Inc. and Tesla and has recommended them. Motley Fool UK recommended Illumina and recommended the following options: Long US$1,920 on Amazon in January 2022 and short US$1,940 on Amazon in January 2022. The views expressed by the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we made in subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account different perspectives, We are better investors.