Baillie Gifford’s flagship £5 billion closed-end fund company, the Scottish Mortgage Investment Trust plc, will enter the FTSE100 index for the first time in its history at the close of the market on March 17.

Scottish Mortgage’s share price has soared about 40% over the past year to give it a stock market valuation of roughly £4.7 billion. It has assets of just more than £5 billion.

Edinburgh-based fund manager Baillie Gifford has assets under management and advice of £145 billion and employs 900 people.

Scottish Mortgage announced that “in recognition of its continued growth and success” there will be a cut in the annual management fees for the fund from April 1.

James Anderson, co-manager of Scottish Mortgage and partner of Baillie Gifford said: “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.”

The fund is jointly managed by Anderson and Tom Slater.

Scottish Mortgage was founded in 1909 initially to offer loans to rubber growers in Malaysia.

It has grown into the UK’s largest conventional investment trust with gross assets of £5.1 billion as at February 28.

Scottish Mortgage chairman John Scott said: “Admittance to the FTSE 100 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.”