Scottish Mortgage shares down 23% from Feb peak

Baillie Gifford's current Edinburgh HQ

The share price of Baillie Gifford’s high-flying flagship fund, Scottish Mortgage Investment Trust plc, fell another 6% on Thursday to around £10.88 as renewed worries about inflation and rising interest rates hit stock markets and the shares of technology companies.

FTSE 100 constituent Scottish Mortgage is the UK’s biggest investment trust and is currently Scotland’s biggest company measured by stock market value with a market capitalization of around £16.7 billion.

The popular fund has now fallen about 23% from its peak of £14.15 on February 15 when US government bonds began a sell-off that spread to high-growth tech stocks.

Scottish Mortgage’s share price 12 months ago was £5.99.

Earlier this week, Scottish Mortgage bought back one million shares at £11.93.

In January, fund research giant Morningstar announced that Scottish Mortgage was its best-performing investment trust of 2020, having achieved gains of 107.46% in its share price.

The managers of Scottish Mortgage are James Anderson and Tom Slater.

Tesla, one of Scottish Mortgage’s largest holdings, has been particularly affected in recent weeks by the move away from technology stocks.

Tesla’s share price was above $880 in January but the electric car manufacturer has since fallen to around $620 per share.

The share price of Amazon, another major holding for Scottish Mortgage, has fallen about 12% since early February.

AJ Bell Investment Director Russ Mould said: “The FTSE 100 surrendered its gains from Wednesday as the sell-off in the bond market resumed with grim familiarity as inflation fears continue to stalk the markets.”

Scott Brown, chief economist at Raymond James in Florida, told Reuters: “The market has been worried about the rise in long-term interest rates and the Fed chairman in his commentary didn’t really push back towards this increase in rates and the market took it as a signal that yields could rise further, which is what has happened.”

Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, said: “Valuations are at the high end of historic ranges, so you are seeing selling, especially in the higher valuation areas like the Nasdaq and tech general.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.