Morningstar downgrades Scottish Mortgage as Stifel says to take profits

Rating slips to 'Silver'

David Brenchley
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Scottish Mortgage's James Anderson
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Scottish Mortgage's James Anderson

Morningstar has downgraded Scottish Mortgage investment trust from a 'Gold' to a 'Silver' rating amid an overhaul of its ratings framework, while broker Stifel has told investors to "lock in gains" from the Baillie Gifford flagship fund.

An acceleration of the trends buoying some of its holdings through the Covid-19 pandemic, such as video conferencing for Zoom and online shopping for Meituan, has helped the £13.7bn trust return 61.1% in 2020 so far, well ahead of its FTSE All World benchmark's modest 3.4% gain. The FTSE 100 constituent features a 0.36% ongoing charge, but Morningstar analyst Robert Starkey noted that this is "offset when the cost of debt is considered, pushing the representative cost up to 0.77%". Scottish Mortgage's Flood: Sometimes the best thing to do is nothing As a result, Starkey downgraded ...

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