OverviewThe value of investments and any income from them may go down as well as up and you or your client may not get back the amount originally invested.
Aims to be a core investment for private investors seeking income. Its objective is to grow the dividend at a faster rate than inflation by increasing capital and growing income. The focus of the portfolio is on global equities but investments are also made in bonds, property and other asset types.
About the Trust
Baillie Gifford took on the management of SAINTS on 1 January 2004. However, the Trust dates back to 1873 which makes it one of the oldest investment trust companies still in existence.
SAINTS was initially formed as The Scottish American Investment Trust Limited by William Menzies in March 1873. Menzies was an Edinburgh lawyer who had visited the United States on several occasions during the 1860s and was struck during those visits by the wealth of investment opportunities in that young and rapidly growing nation.
Initially, SAINTS invested solely in bonds issued by North American railroad companies. However, the investment portfolio broadened out over time to include shares as well as bonds and industrial, commercial and public utility companies. SAINTS has survived numerous events and crises in its long history. Perhaps the most important, in terms of its influence on the future direction of SAINTS, was the First World War. This conflict placed great strain on the nation’s finances and companies such as SAINTS were required to sell some of their overseas investments and invest the proceeds in UK government debt. When the war ended, restrictions on new foreign investment encouraged the Trust to invest in UK companies. From this point onwards, SAINTS investment portfolio has included both UK and overseas investments.
As well as adapting its investment portfolio to changing conditions, the Trust has also had to be flexible in how it conducts its affairs. Until 1970, the Trust managed its investments itself but this changed in 1970 when Stewart Fund Managers Limited was appointed to manage SAINTS. Stewart Fund Managers and various successor companies acted as SAINTS’ manager from that point until 31 December 2003 when management of the portfolio passed to Baillie Gifford.
The investment trusts managed by Baillie Gifford & Co Limited are listed UK companies. The value of their shares, and any income from them, can fall as well as rise and investors may not get back the amount invested.
SAINTS is an investment company within the meaning of section 833 of the Companies Act 2006. Registered in Scotland. Registered number: SC489. Registered office: Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN.
Meet the Trust ManagersJames Dow
James graduated MA (Hons) in Economics-Philosophy from the University of St Andrews in 2000, and an MSc in Development Studies at the London School of Economics in 2001. He spent three years working at The Scotsman newspaper, where he was the Economics Editor. James joined Baillie Gifford’s graduate scheme in 2004 working as an Investment Manager in our North American Equity Team and as a Global Sector Specialist, before joining the Global Income Growth team. He is a CFA Charterholder.Toby Ross
Toby graduated MA in English Literature from the University of Cambridge in June 2006 and joined Baillie Gifford in the same year. He spent some time as an Investment Analyst in the UK Equity Team before becoming a Global Sector Specialist. Toby is a CFA Charterholder.
Meet our DirectorsPeter Moon - Chairman
Mr Moon joined the Board in 2005 and was appointed Chairman in 2016. He was chief investment officer of the Universities Superannuation Scheme Limited fund. He is chairman of Bell Potter (UK) Limited and is a director of JP Morgan Asian Investment Trust plc and First Property plc. He is a former chairman of Arden Partners plc, a former director of MBNA Europe and a former Member of the National Association of Pension Funds Investment Committee.Bronwyn Curtis, OBE - Director
Ms Curtis joined the Board in 2014. An economist, she was Head of Global Research and Senior Adviser to the Head of Global Banking and Markets at HSBC Bank plc. Her previous positions included Head of European Broadcast at Bloomberg LP, Chief Economist for Nomura International and Global Head of Foreign Exchange and Fixed Income Strategy at Deutsche Bank. She is chairman of JP Morgan Asian Investment Trust plc.Eric Hagman, CBE, CA - Director
Mr Hagman joined the Board in 2005 and became the Chairman of the Audit Committee in 2009. He joined Arthur Andersen in 1971 and became the managing partner in Scotland in 1982. He spent the last five years until 2002 in London as a managing partner on the UK Leadership Team. He is a director of WA Baxter & Sons Limited. He was formerly a trustee of the National Galleries of Scotland and a director of British Polythene Industries plc, Glen Group plc, Scottish Financial Enterprise and Scottish Enterprise.Lord Kerr of Kinlochard, GCMG - Director
Lord Kerr joined the Board in 2002 and was appointed senior independent director in 2012. He was Ambassador to the US and the EU, and Foreign Office Permanent Under-Secretary. He is currently Deputy Chairman of Scottish Power, and Chairman of the Centre for European Reform. He was formerly Deputy Chairman of Royal Dutch Shell plc, a director of Rio Tinto plc, Chairman of Imperial College London and a Trustee of the National Gallery.Lord Macpherson of Earl’s Court, GCB - Director
Lord Macpherson joined the board on 15 September 2016. Lord Macpherson was Permanent Secretary to the Treasury from 2005 to 2016, leading the department through the global economic and financial crisis. Prior to that, he held a number of senior posts at the Treasury, including Principal Private Secretary to Ken Clarke and Gordon Brown. An economist by training, he worked for Peat Marwick consulting and the CBI before joining the Treasury. Lord Macpherson is currently Chairman of C Hoare and Co, a director of British Land plc and is a visiting Professor at King’s College, London.
Meet our property managersMatthew Oakeshott
Matthew Oakeshott co-founded OLIM in 1986 and led a management buyout to form OLIM Property Limited in 2012. He graduated from Oxford University with a first class degree in PPE, and worked as Special Adviser to Roy Jenkins as Home Secretary before joining Warburg Investment Management in 1976. He managed Courtaulds Pension Fund from 1981 to 1985.Louise Cleary
Louise Cleary qualified as a Member of The Royal Institution of Chartered Surveyors in 1996. She has over 20 years experience of commercial property investment, including 12 years with Hermes Real Estate and Land Securities.
The Board believes that a flexible approach to investment is important. As market valuations across and within different asset classes vary over time, the ability to adjust asset allocation and portfolio positioning in response to these variations is important.
ObjectiveSAINTS’ objective is to deliver real dividend growth by increasing capital and growing income.
SAINTS’ policy is to invest mainly in equity markets, but other investments may be held from time to time including bonds, property and other asset classes.
The Board believes that a flexible approach to investment is important. As market valuations across and within different asset classes vary over time, the ability to adjust asset allocation and portfolio positioning in response to these variations is important. There are no pre-defined maximum or minimum exposure levels for asset classes, sectors or regions.
The Board also believes that a medium to long term approach is likely to lead to the best investment returns. SAINTS’ performance in any one year is likely to differ from that of its benchmark index, sometimes by a significant amount. Financial markets are volatile, particularly over short time periods, but the Managers are encouraged to view such volatility as giving rise to investment opportunities rather than as a risk to be avoided.
In order to achieve real growth in the dividend, the income generated from SAINTS’ assets needs to grow over the medium to longer term at a faster rate than inflation. Consequently, the focus of the portfolio is on listed equities. Investments are regularly considered and made in a broad range of other asset types and markets. Derivative and structured instruments may also be used with prior Board approval, either to hedge an existing investment or a currency exposure or to exploit an investment opportunity.
The equity portfolio consists of shares listed both in the UK and in overseas markets. The portfolio is diversified across a range of holdings with little regard paid to the weighting of individual companies in the benchmark index. The number of individual companies will vary over time and the portfolio is managed on a global basis rather than as a series of regional sub-portfolios. Investments are made in markets other than listed equity markets when prospective returns appear to be superior to those from equity markets or are considered likely to exceed SAINTS’ borrowing costs. The list of these other investments will vary from time to time as opportunities are identified but include investment grade bonds, high yield bonds, property, forestry, private equity and other asset types.
As an investment trust, SAINTS is able to borrow money and does so when the Board and Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. Whenever long term borrowings cannot be fully invested in such manner, the borrowed funds are used to purchase a diversified portfolio of similar maturity bonds to the borrowings. This has the effect of hedging out much of the interest rate risk and removing the mismatch between borrowing costs and associated investment returns. Gearing levels are discussed by the Board and Managers at every Board meeting and monitored between meetings. The Board will not take out additional borrowings if this takes the level of effective gearing beyond 130%.
The starting position for investment of shareholders’ funds is 100% exposure to equity markets. The allocation to equity markets at any point in time will reflect the Board’s and Managers’ views on prospective returns from equities and the full range of alternative investment opportunities but, in broad terms, SAINTS will gear up through the use of borrowings if equity markets look undervalued and will hold cash or invest in non-equity assets when equity markets look overvalued.
The exposure to listed equities is set within a range of 75% to 125% of shareholders’ funds in normal circumstances. The number of individual equities held will vary over time but, in order to diversify risk, will typically be in a range between 50 and 100.
The Board monitors the aggregate exposure to any one entity across the whole investment portfolio. The maximum exposure at time of investment to any one entity is 15% of total assets. The Board is notified in advance of any transaction that would take an individual equity holding above 5% of shareholders’ funds. SAINTS does from time to time invest in other UK listed investment companies. The maximum permitted investment in such companies is 15% of gross assets.