Baillie Gifford’s flagship fund, the Scottish Mortgage Investment Trust (LSE:SMT) has forward-thinking investors hovering over the buy button. SMT is trading at a 3% discount to its net asset value (NAV) right now.
It is up by 124% in the last five years and up 473% over the past decade, so any opportunity to buy in at a cut-price rate is a no-brainer in my view.
Tech-hungry
The investment trust offers a technology-focused spread of stocks across the world’s two largest economies, with top holding Amazon making up 9% of the fund, closely followed by 6.1% each in Chinese internet giants Alibaba and Tencent.
NASDAQ-listed genome-sequencing life sciences firm Illumina may not be a household name, but it does boast a $43bn market cap and features with 7.5%.
Progressive investors who want some exposure to Elon Musk’s Tesla without messing around with filling out W-8BEN forms and paying outlandish charges to buy US stocks will be happy, as the electric carmaker rounds out the top five largest holdings.
Well managed
Bright spark fund manager James Anderson has made a name for himself by adding ever more Tesla in recent months, even with the volatility that stock brought to the fund.
Anyone who watched the Neil Woodford empire crumble and burn over the last year may rightly be wary of putting too much trust in one man’s vision. Certainly, favoured funds of mine like Lindsell Train Global Equity have suddenly underperformed after the Woodford Patient Capital Trust and Equity Income Fund fell from the stars to the gutter.
But there are no risky unlisted biotech stocks topping SMT’s holdings, just newly-established market leaders like Netflix, so Anderson seems to have a more sensible head on his shoulders.
As the only investment trust big enough to make it into the FTSE 100, the £7.7bn fund should be a winner if you can get it at the right price.
On my watchlist
The other FTSE 100 stock I’m buying into right now is M&G. The asset manager’s demerger from Prudential, completed on 21 October, produced only lukewarm interest in the days after the split.
I think that’s far too narrow-minded and in fact believe there’s significant upside coming to the M&G share price. The plan to pay an 11.92p dividend in 2019 would give investors a 5.6% yield at current prices, while higher dividends approaching 7% could be viable by 2021, based on a range of City analyst projections.
Chief executive John Foley has £341bn of assets under management, serving over 5 million retail customers and upwards of 750 institutional investors.
As the UK and Europe-focused end of Prudential’s saving and investments arm, M&G has fixed income on the brain, which will make a good defensive play as a host of geopolitical and monetary policy decisions (I’m looking at you, Fed) continue to make investing overall a little too much like wheeling down a never-ending rollercoaster.
While Prudential shareholders were handed shares in M&G on a one-to-one basis, even if you weren’t invited to the party to start with, I would say that new investors will find plenty to love in this asset manager.
