Our Philosophy
Scottish Mortgage is a liquid and low-cost portfolio aiming to invest in the world's most exceptional public and private growth companies.
Despite our historical name, our pursuit is not in real estate or mortgages, but in exceptional global growth.
For over a century, Scottish Mortgage Investment Trust has been dedicated to a singular mission: to generate excellent returns for our shareholders.
To do that, we aim to find exceptional growth companies, whether public or private, wherever they are in the world, and hold them over the long term.
Seeking Outliers
Research shows that only a small number of companies make investing in the stock market worthwhile. These companies are outliers that exploit the asymmetric pay-off structure of equities: uncapped upside yet bounded downside. Our core task is to find and invest in companies that have sufficient opportunity to deliver such outlying returns over the long term.
This investing style comes with a tolerance for volatility as progress is rarely in a straight line. We are extremely comfortable with the fact that the biggest outliers are often the most volatile.
Putting this into practice, over the last 10 years, the returns we've generated for shareholders when we've got it right have more than made up for what we've lost when we've got it wrong.
Exposure to Transformational Growth Themes
As a result of our search for outliers, the portfolio is exposed to a variety of growth themes.
The innovation taking place in these areas is led by visionary management teams who we form long-standing relationships with due to our reputation of being long-term, supportive investors.
The key themes emerging from our bottom-up stock picking style are cloud and AI infrastructure, the digitalisation of finance, the evolution of transport and healthcare innovation to name a few.
Access to Private Companies
Our rationale for investing in private companies is simple – companies are staying private for longer, meaning more value is being created prior to companies entering the public markets.
We seek to own companies uninterrupted on their journey from private to public by partnering with great growth companies at all stages. This provides our shareholders maximum exposure to growth but at a much lower cost than most private equity funds.
Globally Unconstrained
Our approach is globally unconstrained, allowing us to invest in exceptional growth companies worldwide. This flexibility helps us build a diversified portfolio of exceptional growth companies in every corner of the globe - from Southeast Asia and the US, to Europe and Latin America.
Long-Term History and Distinctiveness
Baillie Gifford is the long-standing investment manager of Scottish Mortgage, having managed the trust since its inception in 1909. This collaboration and sustained focus on the long term has delivered strong returns for our shareholders over the long run, making it one of the UK's largest and most respected investment trusts.
Our Structure
As a closed-end investment trust, we are protected from cash-flow pressures, allowing us to focus on long-term investments. We manage our share price actively and employ modest gearing to enhance returns. With low fees and high liquidity, we ensure our investors retain more of any returns generated. Find out more in our Explainers section.
