Fund Profile

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Overview
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Overview

Scottish American Investment Company (SAINTS) is a differentiated equity income trust, aiming to deliver real dividend growth by increasing capital and growing income. Distinctively, the trust invests globally in equities, but it also has the flexibility to invest in other areas such as bonds and directly held commercial property.

2015 saw a shift in strategy– moving from a strategy that targeted solely high income – to a portfolio targeting income growth. So far, this has had a transformative effect on total returns relative to peers and the benchmark, and at the time of writing SAINTS is the best performer in the Global Equity Income investment trust sector over one, three and five years. Since the change in strategy, the trust has delivered NAV total returns of 63.8%, ahead of the average trust in the Morningstar IT Global Equity Income sector (42.9%), the IA Global Equity Income sector (35%), not to mention the benchmark – the FTSE All World index (50.3%) over the same period.

SAINTS has grown its dividend every year for the last 38 years and done so at a rate equivalent to 2.9% per annum over the last five. Having paid an uncovered dividend in 2015 and 2016, 2017 was marked by a covered dividend having been paid. Currently only three of the four dividends have been declared for FY18, but the trust is currently yielding 3.2%.

The trust is structurally geared via a somewhat expensive fixed-rate debenture that expires in 2022. Relative to the majority of its peers - which on average have gearing of around 11% - the gearing level of around 17% is fairly aggressive. Much of the gearing has been invested in property and fixed interest, which helps to offset some of the extra volatility that this level of gearing might otherwise be expected to engender.

SAINTS has consistently traded on a premium over the past few years, trading in a range between a premium of about 6% and a discount of around the same level. However, over the past year or so, the trust’s premium rating has been relatively consistent. The current premium of c.3.8% compares to the average of the last year of 3.9% and is marginally higher than the current sector average (-2.4%).

Kepler View

SAINTS offers investors exposure to a wide array of securities and, although an equity fund first and foremost, offers peripheral exposure to property and fixed interest.

Since the shift in strategy in 2015, the trust has consistently outperformed the Global Equity Income sector, beating the peer group over one, three and five years. Alongside the strong capital appreciation, SAINTS has continued its 38-year track record of growing its dividend. A particularly noteworthy move has been the ability to go from an uncovered dividend in 2015, to a fully covered dividend in 2017. This will help to give investors peace of mind, in particular should we continue to see volatile global markets.

There is little surprise that SAINTS has consistently traded on a premium over the past few years, given this achievement. The current premium of c.3.8% compares to the average of the last year of 3.9% and is marginally greater than the current sector average (-2.4%).

Bull
Bear
Strong performance relative to peers
Trading at a premium
Impressive track record for dividend growth
OCF at the costlier end of the sector
Fully covered dividend

Continue to Portfolio
2022 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

18 May 2022 Riding out the storm
We look at trusts with tightly governed discounts which may appeal to investors in volatile markets…
14 Apr 2022 Scottish American Investment Company – A year in review and looking ahead
In this update, co-manager James Dow gives an update on the trust, portfolio activity and outlook, including an insight into SAINTS evolving approach to ESG...
05 Jan 2022 Kepler’s top-rated trusts for 2022
We unveil the winners of our ratings for 2022 in the Growth, Income & Growth and Alternative Income categories…
06 Aug 2020 Recipe for disaster?
In this article, we assess whether the recent shift to concentrated portfolios has been beneficial or detrimental during corrections…
05 Jun 2020 Deep impact
Audio and presentations from our conference this week, where fifteen of the world's best fund managers described a profoundly altered investment landscape...
13 May 2020 Braving the new world
Join 15 of the UK's best known fund managers at the Kepler Trust Intelligence Virtual Summit to find out how they see the world after the pandemic...
27 Mar 2020 Fund Analysis
With a strong track record for capital appreciation and income, the past five years haven’t seen any better opportunities to enter SAINTS…
05 Dec 2019 Seeking an income that stays on track for years to come
29 Mar 2019 The resilient ones
Fund manager Toby Ross tells Colin Donald about the search for companies built for bad times as well as good...
06 Feb 2019 Income for the long haul
With 'ISA season' looming we identify investment trusts which offer long-term, dependable income streams for yield-hungry investors...
01 Feb 2019 Fund Analysis
The trust's shift to an 'income growth' focus continues to pay dividends and performance versus peers has been strong...
25 Jul 2018 The Bulletproof Income Portfolio
Our Bulletproof Income Portfolio was set up to illustrate the benefits of investment trusts in providing a stable income...
27 Jun 2018 A winning combination
New research from Cass Business school helps explain why closed-ended funds have outperformed their open-ended peers in the major equity sectors since 2000...
17 Apr 2018 Fund Analysis
A shift in focus from income to income growth has proved beneficial for this diversified global trust...
09 Jan 2018 The Income Diversifiers Conference
CPD certificate, speaker presentations and slides...
05 Jun 2017 Saintly growth and dividend dependability?
The team at Scottish American Investment Company explain their approach to identifying reliable dividend payers...
08 Aug 2016 New fund research for August
We identify four investment trusts which stand our for different reasons and examine them in detail...
08 Aug 2016 Fund Analysis
26 Jan 2016 Fund Analysis
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