Securities Trust Of Scotland (LON:SESTS) (STS) aims to provide long-term growth in income and capital through investing in global equities. The current manager, Mark Whitehead, was appointed in May 2016 and adopted an unconstrained, bottom-up approach to identify high-quality companies that can be long-term structural winners. The portfolio holds a relatively concentrated number of high-conviction stocks, which the manager believes gives the portfolio both defensive characteristics, as well as delivering sustainable dividend growth. The board has a progressive dividend policy. In August 2018, it announced a refresh of the trust’s marketing strategy, materially increasing its budget, and the appointment of a new non-executive director with extensive marketing expertise.
Investment strategy: Rigorous and highly selective
Whitehead has a bottom-up, disciplined investment process to identify companies with attractive growth prospects and high-quality balance sheets that trade on reasonable valuations. The detailed fundamental analysis involves stress-testing candidate companies’ financials against different adverse scenarios to determine their resilience through economic cycles. The process also incorporates an assessment of a company’s environmental, social and governance (ESG) performance. From an investible universe of over 2,500 companies, the portfolio consists of 35–55 high-conviction investments. Whitehead is head of Martin Currie’s well-resourced team of six investment professionals.
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