Edison reviews Securities Trust of Scotland (STS)

RNS Number : 1588R

Securities Trust of Scotland PLC

26 February 2019

 

London, UK, 26 February 2019

Edison issues review on Securities Trust of Scotland (STS)

Securities Trust of Scotland (STS) aims to achieve long-term income and capital growth through a fundamental approach to global equity investment. The manager, Mark Whitehead, is not constrained by index considerations and focuses on finding 35-55 high-quality companies with sustainable business models and financial resilience, in which to invest for a three- to five-year horizon. He also utilises the trust's ability to employ options strategies in a controlled manner to generate additional income. STS's board adopts a progressive dividend policy and, over the past three years, the annual dividend has increased by 24%. It has also recently refreshed the trust's marketing strategy, and appointed a new independent director, Sarah Harvey, who has considerable expertise in this area.

STS trades at a 6.1% discount to its cum-income NAV, which is broadly in line with the three-year average of 6.4%. The board has recently taken measures to improve demand for STS's shares from existing and new shareholders, including a material increase in the marketing budget provided by the manager and a refresh of the strategy. These efforts may help narrow the trust's discount.

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