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Scottish Mortgage Investment Trust PLC to enter the FTSE100 on 17 March 2017

Scottish Mortgage Investment Trust PLC to enter the FTSE100 on 17 March 2017

The company announces a further cut in its annual management costs

Scottish Mortgage Investment Trust PLC, the UK’s largest conventional investment trust with gross assets in excess of £5 billion* as at 28 February 2017 and managed by Baillie Gifford, the Edinburgh based investment management partnership, will enter the FTSE100 index for the first time in its history, with effect from the close of the market on 17 March 2017.

Scottish Mortgage announces that, in recognition of its continued growth and success, there will be a cut in the annual management fees for the company, effective from 1 April 2017.

Scottish Mortgage already enjoys one of the lowest ongoing charges levels in the sector with an ongoing charge of 0.45% for the year to 31 March 2016, and both the Board and the Managers view this as important to enhancing long term returns for all shareholders. In 2014, the Managers and Board reduced the company’s annual management fees in recognition of the growth of Scottish Mortgage and in furtherance of this aim.

Since then Scottish Mortgage has continued to grow in scale.  Baillie Gifford has offered a further fee cut to the Board as part of the ongoing efforts by all parties to leverage the benefits of increasing scale for shareholders, primarily through reducing costs.  To this end, a tiered fee scale will be introduced from 1 April 2017.  The annual management charge will continue to be 0.3% on the first £4 billion of assets under management, but will fall to 0.25% thereafter.

James Anderson, co-manager of the trust and partner of Baillie Gifford says: “’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.”
John Scott, Chairman of Scottish Mortgage, says:“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 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 annum.”

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