Scottish American Investment lags benchmark in 'bittersweet year'

Scottish American Investment Co PLC on Thursday said its net asset value total return underperformed its benchmark, as it noted that underlying growth in portfolio companies was not rewarded through share price gains.

The investment trust focused on global equities reported a NAV total return of 2.4% for 2025, while its benchmark, the FTSE All-World Index, returned 14.7% over the same period.

Scottish American Investment reported a NAV per share at December 31 of 536.0 pence, down 0.6% from 539.3p a year earlier.

Portfolio Managers James Dow and Ross Mathison described 2025 as a ‘bittersweet year’, in which companies owned delivered ‘good growth’ in earnings.

However, they add that the underlying growth was not rewarded by share price growth in the portfolio holdings, resulting in a ‘lacklustre’, NAV and share price performance.

The company took holding Schneider Electric as an example, noting its 10% earnings gain and 10% dividend uplift, but with its share price remaining flat.

The portfolio managers said this picture was repeated across the portfolio, ‘rising earnings offset by falling P/Es’.

The portfolio managers also noted some ‘stock-specific disappointments’, namely Novo Nordisk AS. Its shares are down 48% over the past 12 months.

Shares in the investment trust were down 0.3% at 525.50 pence on Thursday morning in London. They have risen 0.5% over the past 12 months.

Scottish American Investment proposed a final dividend of 4.595 pence, up 10% from 4.175p. This brought its total dividend for the year to 15.92p, up 7.0% from 14.875p.

‘Looking ahead, 2026 may yet prove a choppy environment for markets. Equities are priced for the good times to roll on, but geopolitics are increasingly unstable, inflation has not gone away, the jury is out on the efficacy of much AI related capital expenditure and there is always a risk from those wildcard factors which no crystal ball can foresee’, the company said.

‘However, whatever the world throws at investors in the coming year, we expect Saints to demonstrate greater resilience than the broader market, given the high quality of the businesses the company owns. Quality compounders can lag during periods of exuberance - but they tend to prove their worth when conditions get tougher.’

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