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Highlights
- Scottish Mortgage Investment Trust became the biggest FTSE100 faller on 21 February 2022.
- Shares in SMT have been going down due to BoEs interest rate hikes, as per experts.
UK-based investment management firm Scottish Mortgage Investment Trust plc (LON:SMT) was the biggest FTSE100 faller on 21 February 2022, with its share prices plunging by around 25% this year.
Let’s look at its share price performance and other aspects.
A rough start to 2022
Managed by Baillie Gifford & Co Limited, Scottish Mortgage Investment Trust makes investments in robust businesses across the globe which have the potential to offer above-average returns. Its global portfolio of companies included big names like SpaceX, Tesla, and Epic Games, which make up around 20% of SMT’s portfolio. Its top ten holdings comprise of Moderna, Tencent, and Nvidia.
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The flagship investment trust of Baillie Gifford had a rough start to 2022 as its share prices dropped significantly. From being among the top FTSE100 performers in the last decade, SMT has now become the biggest FTSE100 faller. According to market experts, shares in SMT have been plummeting due to the rising inflation, which prompted the Bank of England (BoE) to hike the interest rates.
Recently, the central bank raised the interest rate to 0.5%, increasing the rate twice in just a span of three months. This has impacted SMT’s performance as it is significantly exposed to unlisted and growth stocks. Tech stocks or stocks supporting tech companies typically don’t perform well during periods of high inflation. SMT’s portfolio is quite tech-heavy, which has potentially played a role in its slump.
However, as compared to 2020 figures, SMT’s shares are 55% up now. Over the past decade, the company has provided a return of 650% to its shareholders despite ups and downs.
RELATED READ: BDEV, HSBA, LGEN, SMT: 4 best blue-chip stocks to invest now
© 2022 Kalkine Media®
SMT’s share price performance
The 113-year-old trust was listed on London Stock Exchange in June 1986. The current market cap of the FTSE100-listed trust is £13,993.64 million as of 22 February 2022.
Over the past year, the trust hasn’t been able to perform well due to rising inflation and the turmoil caused by the pandemic, and thus it has given a negative return of -27.28%, as of 22 February 2022.
Shares in SMT were 4.2% lower in the afternoon and closed at GBX 969.00 on 21 February 2022. However, SMT’s shares were up by 0.31%, trading at GBX 972.0 at around 1:30 PM (GMT) on 22 February 2022.
Also read: Clipper Logistics (LON:CLG): Is it going to be another exit from LSE?
Bottomline
Scottish Mortgage Investment Trust has given exceptional returns to its shareholders over the years. Even though shares in SMT have been plunging since January this year, the company may provide good returns to its shareholders in the long run.
Also read: Evraz (EVR): It is a buy amid ongoing Russia-Ukraine conflict?
Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
