Outlook for Scottish Mortgage in 2022 and my best UK trusts

TL;DR

UK Focus Trust and UK stocks have the potential for growth and recovery, with Aberforth Smaller Companies and BlackRock Frogmorton performing well. Income seekers can consider City of London and Aberforth Small Cap for solid dividends. Successful turnaround stories include Bailey Gifford European Growth and Brown Advisory US Smaller Companies. Scottish Mortgage may have a less stellar year ahead due to rising risk aversion.

Transcript

hello with me today i have thomas mcmahon investment trust research manager at kepler trust intelligence hi thomas hi lee what do you think about uk focus trust so domestic stocks have lagged in international peers since the kovid recovery began back in march 2020 and they still have some catching up to do um what are your picks um for uk um stocks... Read More

Key Insights

• 🛩️ UK stocks, especially smaller companies, have the potential for growth and recovery.
• 🌍 Domestic stocks have lagged behind international peers since the COVID recovery began.
• ♑ City of London and Aberforth Small Cap offer solid dividend options for income seekers.
• 👾 Bailey Gifford European Growth and Brown Advisory US Smaller Companies are successful turnaround stories in the investment trust space.
• 😮 Scottish Mortgage may face challenges in the short term due to rising risk aversion and expectations of higher interest rates.
• 👲 Investing in small-cap opportunities and quality growth may be attractive in the coming years.
• 👋 Real asset trusts with inflation linkage can be a good investment choice for income seekers.

Questions & Answers

Q: Which UK stocks have performed well in the recovery period since the pandemic?

Aberforth Smaller Companies and BlackRock Frogmorton have shown exceptional performance in the UK smaller company space, with a focus on domestic earnings and value approach.

Q: What are some investment options for income seekers?

City of London is known for its rock-solid dividend reserves and has been delivering great dividends for many decades. Aberforth Small Cap may offer lower starting yield but has the potential for dividend growth in small caps. Real asset trusts with inflation linkage can also be attractive for income.

Q: Are there any investment trusts that have successfully turned around their performance?

Bailey Gifford European Growth, which switched from a value to a growth manager just before the pandemic, has performed exceptionally well. Brown Advisory US Smaller Companies, with a quality growth approach, has also made a good start despite market fluctuations.

Q: What is the outlook for Scottish Mortgage in the coming year?

While Scottish Mortgage has had an amazing year, the short-term outlook may not be as promising due to expected risk aversion, rising interest rates, and people seeking lower risk investments. However, the long-term proposition of Scottish Mortgage remains strong.

Summary & Key Takeaways

• UK stocks have been lagging behind international peers since the COVID recovery, presenting a potential opportunity for growth and recovery.

• Aberforth Smaller Companies and BlackRock Frogmorton have shown exceptional performance in the UK smaller company space.

• For income seekers, City of London and Aberforth Small Cap offer solid dividend options.

• Turnaround success stories include Bailey Gifford European Growth and Brown Advisory US Smaller Companies.

• Scottish Mortgage may face a challenging year ahead due to rising risk aversion and expectations of higher interest rates.