Fund Profile

Securities Trust of Scotland 27 October 2022


This is a non-independent marketing communication commissioned by Troy Asset Management. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

A new version of this profile is available. View Latest

Securities Trust of Scotland (STS) has performed well over the past 12 months, thanks to the quality-growth strategy employed by Troy since it took over management in November 2020 (see Performance). STS’s managers James Harries and Tomasz Boniek prize capital preservation highly, and have a long track record of preserving investors’ capital in rough periods on the open-ended Trojan Global Income Fund. With STS they implement the same strategy in the closed-ended space, and their portfolio is highly concentrated, with a focus on high-quality stocks whose returns have low correlation to the market’s, thus delivering on STS’s rising income and capital growth investment objectives.

STS also has strong ESG credentials. James and Tomasz are co-managers of the Trojan Ethical Global Income Fund and incorporate ESG into STS’s investment process. This has been recognised by external parties: for example, amongst all global equity portfolios Morningstar rates the trust ‘above average’ for sustainability.

STS’s Dividend was rebased in 2021, resulting in a current yield of 2.7%. This is at the lower end of the peer group’s yields; however, James and Tomasz believe they have positioned the portfolio for strong, sustainable long-term earnings and dividend growth.

Finally, STS operates a Discount control mechanism (as is common across the trusts that Troy manages), which is enforced to improve liquidity and minimise discount volatility for the trust’s shareholders.

Analyst's View

We think recent strong returns illustrate the potential for James and Tomasz’s strategy to perform well in difficult markets. The focus on strong balance sheets, good management and sustainable earnings also looks like an attractive strategy in a troubled economic climate. We note that historically the managers’ portfolios have tended to perform well in market drawdowns, which is likely to be reassuring given the risks that currently abound.

The trust’s Dividend is not high when compared to those of its peer group, and therefore will not satisfy those only looking for a current high yield. However, we think the trust should appeal to those looking for a long-term income investment. The portfolio is tilted to where the managers think earnings growth will be strong and sustainable, and if they are right this should give a stable or rising income for many years. Additionally, the trust could appeal to those who want to benefit from the total return potential in reinvesting a growing dividend.

In the short term, some companies and industries that are less focussed on ESG factors have performed well. However, the Ukraine war has only reaffirmed the world’s commitment to transition away from fossil fuels. The strong ESG credentials of the trust are an additional factor that should attract many investors, and may be accretive to financial returns over the long run.


  • Capital preservation and absolute return focus is reflected through strong 12-month performance and greater downside protection
  • Dividend rebasing may increase the sustainability of dividend growth over the long term, increasing long-term suitability for income investors
  • Discount control mechanism should ensure liquidity for shareholders and reduced discount volatility


  • Quality-growth style may lead to underperformance during rallies led by cyclical ‘value’ stocks
  • Dividend rebasing has led to a lower current yield versus the peer group
  • Current OCF is higher than the peer group average
Continue to Portfolio

Fund History

14 Dec 2023 Fund Analysis
STS’s balance between quality income and growth may prove resilient in a challenging economic environment…
06 Dec 2023 Fool's gold
Cash would have been a poor investment through this period of high inflation…
08 Jun 2023 Fund Analysis
STS’s focus on optimising the balance between quality income and growth may prove valuable in an uncertain market environment…
11 May 2023 Tipping point
Battered growth strategies have staged a comeback recently, but what happens now?
27 Oct 2022 Fund Analysis
STS’s high-quality global equity income approach has proven resilient over both the long and the short term…
11 Feb 2022 Fund Analysis
A high conviction, high-quality approach to global equity income investing…
09 Feb 2022 The dividend dilemma
We examine the trade-off between earning a current high dividend yield and growing future dividends...
09 Dec 2020 Fund Analysis
STS has a new manager with a strong track record…
09 Dec 2020 Flash update: Securities Trust of Scotland
We look at the recent change in management of STS and what it means for investors…
09 Jan 2020 Full house
The KTI team’s ‘top picks’ for 2019 have delivered strong results…
25 Sep 2019 Fund Analysis
Led by Mark Whitehead, STS offers an attractively valued portfolio of global equities...
03 Apr 2019 Nice guys finish first
We review the rise of ESG, its impact on investment trusts, and the various ways ESG has evolved in the trust world...
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...
23 Jan 2019 Fund Analysis
Securities Trust of Scotland (STS) is a broadly diversified global equity income portfolio, which has achieved a solid yield of 3.8%...
31 Dec 2018 Ladies, gentlemen and non-binary persons, start your engines…
With Britain only months away from the bright, sunlit uplands of Brexit and America officially ‘great’ again, we present a selection of ideas for what looks set to be a fascinating year…
29 Nov 2018 Fund Analysis
A broadly diversified global equity income offering with an above average yield of 3.8%, on a very wide discount relative to its peers...
12 Oct 2017 Roaring back…
We analyse the drivers behind the significant outperformance of global active managers in 2017, following what was a very poor year for them in 2016...
03 May 2017 I'm not interested in 'me-too' portfolios...
We meet Securities Trust of Scotland manager Mark Whitehead and ask how he is helping to shape Martin Currie's equity income strategy...
16 Mar 2017 Having your cake and eating it too?
We look into the new fad of trusts paying their dividends out of capital and analyse whether or not it really is a sustainable strategy...
22 Feb 2017 Into the wilderness...
In this detailed study of the global equity sectors, we analyse how managers are positioned in a world of high valuations and seismic political changes...
21 Feb 2017 Fund Analysis
A global equity income fund with an experienced management team and a focus on dividend growth...
11 Nov 2016 Analysis: The mounting threat to equity income trusts' dividends...
With fears over potential dividend cuts across the UK mounting, we analyse how safe UK equity income's dividends really are...
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
Please enter a valid password
Please enter a valid email address
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
Please enter a company name
Please enter a location name
Please choose an option
Please enter a platform
Please choose an option
Please enter a trust
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
Please select an option
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
Please enter your first name
Please enter your last name
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
Please enter a valid password
Please enter a valid password
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.