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Scottish mortgage Investment trust (LSE:SMT) shares are among the worst performers on FTSE 100 Last year. The investment trust – which focuses on growth and has significant exposure to US, Chinese and unlisted stocks – reached more than £14 a share before it floated last autumn.
So let’s take a closer look at Scottish Mortgage and why I think this stock is a bargain not to be missed.
Different susceptibility to growth
Buying into Scottish loans helps me increase my exposure to growth stocks. The thing is, not all growth stocks are good. In fact, many have failed. So buying a Scottish mortgage with a position in 100 companies gives me different exposure to growth, even if it’s just one transaction. But when Scottish mortgages fell by 38%, many growth stocks fell further.
However, the trust reflects the value of the shares it owns. And last year, most growth stocks fell. In fact, all of Scotland’s top 10 mortgage holders, except Tesladecreased during the year.
Environment is still challenging.
In the year In 2021, overall growth stocks became more expensive. And that, along with rising US Treasury yields, led to a selloff. But the macroeconomic environment remains challenging for growth stocks in 2022 and that’s why we’re still seeing Scottish mortgage stocks languish at 52-week lows.
High interest rates represent a challenge for growth stocks, because they increase the cost of borrowing and increase the cost of growth. Moreover, many SMT holdings, such as China Electric Vehicle (EV) Co NIO They are not profitable yet. So borrowing is normally required.
Why am I bullish on Scottish mortgages?
Following the fall in growth and tech stocks earlier in the year, I think it’s fair to say that, overall, many companies in this area are currently trading at more attractive valuations.
So that’s a good starting point. But I like this fund because it has a track record of picking the next big winners. Faith invests in Amazon and Tesla Before they became household names and, naturally, the returns were huge.
In addition, there was a change in the resignation of former chief James Anderson at the beginning of this year. But it is faith. Methodology It remains the same.
And despite forecasts of a recession, I’m backing some Scottish mortgage holdings to further boost the market. For example online retailers like Amazon — SMT top 10 hold — Perhaps reflecting long-term trends in online shopping, it outperforms high street retail.
The same goes for Tesla and NIO. The recession will put downward pressure on costs, but I expect to see a continued revival in EV sales over combustion-powered cars.
I recently bought a Scottish mortgage for my pension and will buy more at current rates.