Interim Management Statement
SECURITIES TRUST OF SCOTLAND PLC
INTERIM MANAGEMENT STATEMENT
COVERING THE PERIOD FROM 1 APRIL 2014 TO 30 JUNE 2014
Manager's commentary
Global equity markets rose in aggregate over the quarter. The MSCI World High Dividend Yield index gained 3.0% in sterling terms. Japan was the strongest region, and Pacific ex Japan the weakest. Energy was the best-performing sector, while industrials fared the worst.
The Company's NAV rose by 1.6% during the period, lagging its benchmark. The biggest detractor from performance was Pfizer. The US pharmaceutical giant publically declared an interest in AstraZeneca but the bid was rejected. Not owning the US quoted semiconductor chipmaker Intel was a notable negative during the period as it had higher than expected PC unit demand. Shares in the US household-goods firm Procter & Gamble fell after data emerged showing weakness in certain home and personal care categories where P&G is involved. Swiss healthcare name Roche was another notable detractor during the period.
On the other side, not owning US telecoms firm AT&T during part of the period had a positive effect on relative returns as the firm reduced its earnings per share guidance. Luxury fashion brand Hugo Boss also did well. French oil multinational Total was a strong performer on the back of recent expenditure and high-margin barrels coming on stream. Direct Line Insurance Group was another notable positive during the period.
In terms of portfolio activity, we switched out of one US telecoms giant (AT&T) into another (Verizon) during the period, attracted by the relative valuation and growth prospects of the latter. We also exited positions in French bank BNP Paribas and Spanish telecommunications firm Telefónica. We bought German quoted media conglomerate Prosiebensat.1.
Alan Porter
PROFILE
Objective To achieve rising income and long-term capital growth by investment in global equities
Benchmark MSCI World High Dividend Yield index
Sector Global equity income
Launch 28 June 2005
PORTFOLIO
Sector allocation
31 Mar 30 June
Healthcare 20.9% 20.3%
Consumer staples 15.3% 16.8%
Energy 14.4% 15.9%
Financials 14.3% 14.1%
Consumer discretionary 11.8% 14.0%
Telecommunications 10.9% 7.1%
Materials 5.3% 5.9%
Industrials 4.5% 4.6%
Utilities 3.9% 4.2%
Information technology 1.8% 1.8%
Cash 2.7% 1.0%
Gearing (5.8%) (5.7%)
Regional allocation
31 Mar 30 June
Europe 53.8% 55.5%
North America 39.0% 39.0%
Asia Pacific ex Japan 6.2% 6.1%
Japan 2.6% 2.7%
Emerging markets 1.5% 1.4%
Cash 2.7% 1.0%
Gearing (5.8%) (5.7%)
Top 10 holdings (42.8% of total portfolio)
|
Roche |
6.3% |
|
Chevron |
5.1% |
|
Total |
4.9% |
|
Pfizer |
4.3% |
|
Sanofi |
4.2% |
|
Royal Dutch Shell |
3.8% |
|
Philip Morris International |
3.8% |
|
Abbvie |
3.7% |
|
British American Tobacco |
3.6% |
|
McDonald's |
3.1% |
|
|
|
|
Number of holdings |
43 |
|
Number of countries |
12 |
Key facts
Total net assets £175.2m
Share price (p) 141.0
Net asset value per share (p) 143.3
Discount (premium) 1.6%
Historic net yield 3.4%
Source for historic yield: State Street as at 30 June 2014.
The historic yield reflects dividends declared over the past 12 months as a percentage of the mid-market share price, as at the date shown. Investors may be subject to tax on their dividends.
PERFORMANCE
Discrete performance over 12 months to 30 June
2014 2013 2012 2011 2010
Share price (1.6%) 26.1% 9.7% 37.5% 16.9%
NAV 5.4% 22.3% 2.1% 32.2% 25.8%
Benchmark 9.9% 21.3% 3.6% 25.6% 21.1%
Cumulative performance over periods to 30 June 2014
|
|
One month |
Three months |
Six months |
One year |
Three years |
Five years |
Share Price (3.8%) (1.7%) (1.2%) (1.6%) 36.2% 118.8%
NAV (0.4%) 1.6% 1.7% 5.4% 31.7% 119.0%
Benchmark (0.6%) 3.0% 5.1% 9.9% 38.1% 110.2%
Source: Martin Currie and Morningstar. Bid to bid basis with net income reinvested over the periods shown in sterling terms. These figures donot include the costs of buying and selling shares in an investment trust. If these were included, performance figures would be reduced.
Prior to 1 August 2011, the Trust's benchmark was the FTSE All-Share index and the MSCI World High DividendYield index thereafter.
Past performance is not a guide to future returns.
Capital structure
Ordinary shares 122,299,148
Board of Directors
Neil Donaldson (chairman)
Andrew Irvine
Edward Murray
Rachel Beagles
Angus Gordon Lennox
Material events
The results for the year ended 31 March 2014 were announced on 6 June 2014.
The fourth interim dividend for the year to 31 March 2014 of 1.35p per share was paid on 4 July 2014 to shareholders on the register on 20 June 2014 making a total for the year of 4.8p.
Website
The trust has its own website at www.securitiestrust.com. There you will find further details about the trust, information on Martin Currie, daily share prices (and associated risks), and you can access regular videos by the manager.
Key information
Year end 31 March
Annual general meeting July
Interim dividends paid March, July, September, December
Investment management fee as at 31 March 2014† 0.6%
Ongoing charges ratio 31 March 2014* 1.0%
TIDM code STS
Reuters code STS.L
†Martin Currie is paid an investment management fee of 0.6% of NAV of the company per annum, payable quarterly.
*Percentage of shareholders' funds. Includes annual management fee.
Net asset value and dividend history
|
As at |
Share |
NAV |
Discount/ |
Dividend |
|
31 March |
price |
per share |
(premium) |
per share |
2006 125.5p 135.6p 7.4% 2.85p
2007 141.3p 148.4p 4.8% 5.05p
2008 116.0p 121.5p 3.8% 5.45p
2009 66.3p 75.4p 12.2% 5.45p
2010 99.0p 109.4p 9.5% 4.65p
2011 108.0p 117.4p 8.0% 4.65p
2012 122.0p 119.8p (1.9%) 4.70p
2013 146.3p 141.8p (3.2%) 4.75p
2014 144.8p 141.6p (2.9%) 4.80p
Past performance is not a guide to future returns.
This information is provided by RNS
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