Securities Trust of Scotland Downgraded

INVESTMENT TRUST RESEARCH UPDATE: Morningstar analysts have moved the trust to Neutral

Szymon Idzikowski 5 January, 2015 | 6:20PM
Facebook Twitter LinkedIn

Following the Morningstar Analyst Ratings Meeting on 11th December 2014, we have downgraded the Securities Trust of Scotland (STS) to a Morningstar Analyst Rating™ of Neutral. The fund’s rating was previously Under Review following Martin Currie’s acquisition by Legg Mason. While we think the acquisition itself should bring stability to the firm, our conviction in the fund has decreased. Since Alan Porter’s appointment, stock selection has not added alpha in a consistent way and the manager has done little to differentiate the fund in an increasingly competitive Global Equity Income peer group. Although its expenses still compare favourably with its peers’, the cost advantage will likely add less value over time in a post-RDR world. We thus believe a Neutral rating is a more appropriate reflection of our conviction.

Find out more about how Morningstar analysts rate funds and investment trusts here.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Securities Trust of Scotland Ord234.00 GBX1.74Rating

About Author

Szymon Idzikowski

Szymon Idzikowski  is a closed-end fund analyst with Morningstar.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures