Fund Profile


Disclosure – Independent Investment Research

This is independent research issued by Kepler Partners LLP. The analyst who has prepared this research is not aware of Kepler Partners LLP having a relationship with the company covered in this research report and/or a conflict of interest which is likely to impair the objectivity of the research and this report should accordingly be viewed as independent.

SAINTS has an exceptional record of delivering inflation-busting income growth…

Scottish American (SAIN) is designed to be a core holding for investors seeking income. Its management team, led by James Dow, invests globally in pursuit of dividend growth. Income growth is prioritised over high yield, and James looks for companies which can deliver real growth in cash flow and earnings over the long term, meaning they should be able to deliver real growth in dividends.

The core of the proposition is a portfolio of equities with a bias to high-quality compounders, so exposure to growth companies and technology companies is higher than the typical equity income portfolio. Companies will be bought with a low current yield if James thinks they will be able to deliver attractive, above-inflation dividend growth. This portfolio is supplemented with a higher-yielding property portfolio, currently worth c. 9% of the total portfolio, and smaller positions in bonds and infrastructure equities, which also help boost the yield. At the time of writing, the yield is 2.8% versus an AIC Global Equity Income sector average of 3.6%, but SAIN (usually referred to as SAINTS) has delivered 50 consecutive years of Dividend growth, making it one of the AIC’s Dividend Heroes.

The trust has delivered attractive total returns to investors over the long run, with a low beta to equity markets and lower than benchmark volatility. As we discuss in the Performance section, from 2015 to 2021, the trust outperformed the sector and the FTSE All World Index benchmark each year. The trust also outperformed the index in the down year of 2022, although while it delivered positive returns in 2023 it was behind the benchmark. Having less than the index in the ‘Magnificent Seven’ held the trust back a bit, while the non-equity holdings underperformed equities.

Like most investment trusts, SAINTS’ Discount trended wider over 2023, and at the time of writing it is well below its five-year average, at 9% versus 0.5%.

Analyst's View

SAINTS gives up a bit of yield in order to deliver income growth. To see how this has worked in practice, we looked at the track record since 2003, when Baillie Gifford took over management. Over this period, the dividend has grown by 4.3% per annum while UK CPI has averaged just 2.8%. The upshot is that the dividend has grown by 2.4 times, and an investor would now be receiving a yield on their original investment of 7.6% (it was c. 3% in the first year). Twenty years is a reasonably likely length of time for a retirement to last, and so we think this profile should appeal even to income investors in drawdown, as it should help support the real purchasing power of any income being taken. However, given the low starting yield, we think any such investor would be most likely to hold SAINTS alongside higher-yielding funds with less income and capital growth potential.

The discount that has opened up over the past year could have created an interesting long-term entry point. However, we note that discounts have widened across the investment trust sector over the period, and this may reflect a lower appetite for equity investments in a world of higher rates. If rates are slow to decline, we think this could see discounts remain wide in the short term, at least in the absence of corporate activity. While SAINTS has issued shares in nine successive years, at the time of writing it has not bought any back since the discount emerged.


  • Excellent track record of real-terms dividend growth
  • Attractively cheap long-term debt could boost returns
  • Doesn’t sacrifice growth potential as much as many peers


  • Lower yield than many peers
  • Gearing increases downside risks too (although historically this has been offset by lower beta portfolio)
  • Bias to growth over value could lead to underperformance in certain market environments
Continue to Portfolio

Fund History

03 May 2024 SAINTS: Manager Insights
Investment manager James Dow discusses SAINTS’ journey to 50 years of dividend growth, recent portfolio adjustments, and a positive outlook despite economic uncertainties...
02 May 2024 Fund Analysis
SAINTS has an exceptional record of delivering inflation-busting income growth…
08 Aug 2023 Finding sustainable dividend growth in turbulent markets
As SAINTS celebrates its 150th anniversary, Citywire’s Kathrin Schindler speaks to the trust’s co-manager James Dow about portfolio positioning, what influences the stock-picking process and the outlook for the year ahead...
23 Jun 2023 The SAINTS story: 150 years of income and growth
Remembering the visionary Edinburgh lawyer who laid the foundations of an enduring powerhouse of global investing. The birth of The Scottish American Investment Company a century and a half ago, is all thanks to William Menzies’ vision of the US’s rise to economic supremacy...
28 Apr 2023 SAINTS Manager Insights
A half-century of dividend growth? Co-manager of The Scottish American Investment Company (SAINTS), James Dow, is hopeful it will be so as he looks to the future in this annual update...
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
21 Oct 2022 SAINTS: The wonder of compound interest
So just how powerful is compound interest? Joint manager of The Scottish American Investment Company (SAINTS), James Dow, unpacks this question and explores how the trust’s portfolio is well placed to capture its benefits...
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
30 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...
15 Aug 2018 The income edge
Last year saw investment trusts soar in popularity among both retail investors and wealth managers. We examine why this has happened, as well as the structural advantages of investment trusts for income-hungry investors...
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...
13 Apr 2018 Fund Analysis
A shift in focus from income to income growth has proved beneficial for this diversified global trust...
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