How SMT Share Price Recently Behaved

The Scottish Mortgage Investment Trust PLC (SMT) is an investment trust focused on long-term global growth. Managed by Baillie Gifford, SMT aims to maximize total returns over the long run by investing across a diverse portfolio of public and private companies.

This article will provide an overview of Scottish Mortgage's investments, dividend payment frequency, recent SMT share price trends, and price-influencing factors. Whether you’re considering investing in SMT or just want to learn more about this flagship growth trust, read on for key details.

What Does Scottish Mortgage Trust Invest In?

Scottish Mortgage Trust aims to achieve long-term capital growth by investing globally in innovative and high-growth companies. An analysis of its top 10 holdings reveals that this investment trust dedicates over 40% of its portfolio to the technology sector.

Based on the Fidelity International report, the trust’s largest holding as of December 2023 is in ASML Holding NV, which accounts for 7.32% of total investments. This Dutch manufacturer produces lithography machines that are pivotal to creating semiconductor chips. Scottish Mortgage is also bullish on Moderna Inc., the vaccine pioneer, with a 6.09% allocation.

Scottish Mortgage has sizeable stakes in electric vehicle maker Tesla Inc (5.49%) and graphics chip specialist NVIDIA Corp (5.01%) in the consumer technology space. The trust ranks in its top 5 with a 4.58% position in Latin American e-commerce platform MercadoLibre.

Other investments include Amazon.com (4.17%), Chinese e-commerce group PDD Holdings (3.44%), luxury carmaker Ferrari NV (2.58%), and Chinese food delivery app Meituan (2.36%). Additionally, 2.56% is allocated to The Brandtech Group, an umbrella of digital advertising technology firms.

Learn about the technology sector in this article: Thematic investing: Investing in technology

How Often Does Scottish Mortgage Pay a Dividend?

Scottish Mortgage operates on a financial year basis from April to March. In line with its dividend policy, it pays out two dividends per financial year - an interim dividend and a final dividend. This structured approach provides shareholders with clear expectations around dividend timing and income consistency.

The interim dividend is typically declared and paid towards the end of the calendar year in November or early December.

Recent SMT Share Price

The recent behaviour of Scottish Mortgage’s shares has involved some recovering gains following weakness in the second half of 2022. As of December 2023, the SMT share price closed at 733.60p, preceded by 724.60p in November 2023 and 642.20p in October 2023. Going back a few months earlier, the SMT share price ended at 669.60p in September 2023, 685.60p in August 2023, 735.80p in July 2023, and 666.40p in June 2023. So, while there was a pullback six months ago and beyond, it has since rebounded.

Despite the stabilization and upward movement into the end of the year, the SMT share price volatility persists amidst broader uncertainty in macroeconomic conditions. But, the long-term picture still shows substantial growth over several years. The future direction will ultimately depend on various internal and external factors impacting its holdings.

Check this interesting article: Recession Proof Stocks CFDs and Other Assets

Factors Influencing the SMT Share Price

What’s behind Scottish Mortgage’s recent share price swings? As a globally diversified growth-focused trust, various factors are at play:

Company Financials and Portfolio Performance

As an investment trust, SMT’s underlying financial health and the gains or losses in its investment portfolio directly impact its share price over time. After years of stellar returns, SMT’s portfolio struggled in 2022 as high multiple technology and growth stocks fell out of favor amid rising interest rates and fears of recession.

Moderna, Illumina, and Tencent Music weighed on recent returns. If these innovative picks can regain positive momentum and SMT demonstrates improving profits and portfolio gains going forward rather than losses, it could boost investor confidence and the trust’s share price.

Broader Market Rotations and Asset Class Sentiment

Significant rotations in the market from expensive growth stocks into more reasonably valued names have impacted SMT, given its portfolio tilt towards disruptive innovators across sectors like e-commerce, digital health, and electric vehicles. Moreover, rising interest rate environments historically pressure longer-duration assets that depend heavily on future profit potential rather than current earnings.

However, some market analysts predict inflationary pressures may be near peaking levels. If rates stabilize in 2023 and forward and investors renew interest in secular growth stories, it could propel a rebound across SMT’s portfolio of future-focused public and private companies.

Investment Management Reputation and Stewardship

SMT has cultivated a reputation for standout returns under the stewardship of veteran manager James Anderson and the broader Scottish-based Baillie Gifford investment team. However, recent stumbles have tightened the performance gap versus some global growth fund competitors.

Maintaining stellar gains is paramount to differentiating SMT’s value proposition. While Anderson has taken a step back, seasoned colleagues like Tom Slater, with equally long tenures at the helm, offer continuity in identifying and backing trailblazing founders and technologies.

Macroeconomic Uncertainties Across Global Markets

Broader economic troubles like supply chain woes, energy cost inflation, geopolitical conflicts, and associated recession fears foster market volatility and investor unease toward risk assets.

The long-term durability and scale potential of SMT’s portfolio companies tied to industries like electric vehicles, autonomous ridesharing, synthetic biology, and virtual reality may continue to face sceptical scrutiny. Until macro visibility improves, fears of slowed growth and prolonged downturns could spell ongoing choppiness for global equities and the SMT share price performance.

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Bottomline

Scottish Mortgage Investment Trust offers investors exposure to an innovative portfolio aimed at capitalizing on future global growth trends. While recent SMT share price volatility reflects broader uncertainty, the company remains focused on backing pioneers in fields like biotech, AI, and EV transportation over a long horizon.

Despite near-term turbulence, the SMT share price future could reward patient believers by incorporating it into their portfolio. Before trading in this company or related industry, don’t forget to continually research and educate yourself on market skills and the trust’s holdings.

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“When considering “CFDs” for trading and price predictions, remember that trading CFDs involves a significant risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be considered investment advice.”