Is it OK to buy Scottish Mortgage investment trust again?

Scottish Mortgage investment was hit hard by the tech-stock crash, and it is still being buffeted by headwinds. Should new investors wait for those to ease before buying in?

Sculpture of Tencent QQ logo at Tencent HQ
A big bet on Chinese tech such as Tencent has been costly
(Image credit: © VCG via Getty Images)

At one point Scottish Mortgage (LSE: SMT) was the UK’s biggest investment trust by market capitalisation, championing a generation of disruptors from Amazon to Tesla. But if you look at the investor bulletin boards, it is now the subject of much scorn and vitriol.

The most recent trading update showed that net asset value (NAV) total returns for the year to 31 March were negative 13.1%, compared with a 12.8% gain for the FTSE All World index. The share price currently trades at 692p, a 55% decline from its 1,543p peak. It’s now on a wide 16% discount to NAV (the average discount over the past year is 1.3%).

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Explore More
David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.