@tomsvindal It is true that SMT has long stated it’s faith in various Chinese stock and it also true that a turn down in that market has had an impact on the NAV. But I am not sure where your top 10 composition list comes from and what date that snapshot represents. It doesn’t match the 31/10/21 composition list. I know that the top 10 list from 31/10/21 is unlikely to match the top 10 from today … sales, purchases plus change in relative values.
Is it worth buying more? Well I can’t answer that question - it all depends on your faith in the trust. Bear in mind that the portfolio make up is a 5 year+ view and I doubt that manager will change its composition on what they see as short term market volatility.
IMO, when you buy into a trust like this you put your faith in the hands of the manager … and if I then start to panic or second guess the manager I’d think I am not sure why I bought the trust in the first place. It’s what I refer to as a buy and forget trust.
Thanks @bitflip & @J4ipod94 I just realised I used an out of date list in that.
Just getting to grips with things and to be honest it’s interesting seeing how it plays out. Still scary all the same when you lose a couple of 100 quid in a few hours.
Try watch some videos from the managers and read the annual reports. They might help calm you down and think about the long term.
They often talk about thinking 5Y+, anything shorter and stock prices are at the whims of market sentiment
If you can’t stomach large drawdowns in the share price then a less volatile fund would be better for you: Perhaps a passive global ETF
Hey @tommysvindal yup I feel for you. Pretty yucky experience seeing stock drop (and so quickly). One of the things that not everyone realises about SMT is that it is a high risk Investment Trust. There are several reasons for this: it is a concentrated company trust plus it is a highly opinionated trust. The core thing is that is that if there is a market down turn don’t be surprised if SMT drops more than the market. The reverse is true when there is a market upturn: when the market on the up it is likely that SMT will perform much better than the market.
In my opinion, many retail customers have been attracted to this trust because they have seen the stellar numbers. But they haven’t read the annual reports so they don’t see that it is concentrated and opinionated trust. So they don’t know what they are getting into. I think that the SMT annual reports are a wonderful read. They are well written and you don’t need to be an expert to understand the view of the managers. I strongly recommend, as @j4ipod94 also recommends, reading at least the latest annual report.
If you can’t handle large swings then this isn’t an investment for you. Don’t look at it everyday. Invest for 5+ years and you’ll likely be well rewarded.
Yeah this return chasing behaviour is a big drag on investor returns. SMT is broadly similar to ARKK, which although it has significantly outperformed the benchmark has actually ended up destroying investor value - this is because the inflows are so massive during the hype (and corresponding peak) that the following losses more than offset the big gains of the fewer, earlier investors.
This is a tale as old as time, despite its many years of outperformance Lynch’s Magellan fund famously lost the average investor money for the same reason.
But looking at the history and if it continues the long term trend, a big “if” I know, even with a dip you should make money. Or are you implying those retail that sell too early?
Yeah, for most active open funds inflows are highly correlated with recent performance. When that trend reverts you see lots of people selling and net outflows from the fund - i.e. investors do the opposite of buying the dip.
I realise as an investment trust this is a bit different for SMT, but I think the general point on return chasing is still relevant.
Does a massive inflow of capital skew the balance between public and private holdings? I have SMT on my watch list for Space X exposure but given they’re private every £1 inflow must dilute this exposure. Thinking of just using Alphabet and getting China from an ETF.
The big difference is SMT is a trust not an open fund so it doesn’t take in new money for investment. So I don’t think you need to worry about that getting diluted through big cash injections.
For this reason and others I do personally prefer SMT to ARKK, but I just think investors need to be wary about chasing historic returns.
Probably still worth reviewing to check you are happy with the other ~99% of assets/thesis alongside SpaceX though.
I’m putting together my pension plan and will take a DD into their holdings first. Keep ‘em peeling as I’ll be seeking the help of the ‘boggleheads’ to make sure I’m not doing anything super daft!
I put all my ISA allowance into SMT each month. Dollar cost averaging is a good way to even out the volatility in terms of how your returns may look. The key thing to remember about SMT is that it’s been around in one form or another for over 100 years and sometimes the strategy changes but anyone to write it off will be missing out!
Agree with what others have said already and the reports are a great read. For me this is a 10+ year hold hopefully so not really fazed by the swings. People need to make decisions for their own situations though and determine if this sort of trust is right for them.
This quote always stands out to me “We look to add value over five year time frames, preferably much longer. We don’t see that we can add much more than anyone else in the short term”
Hi @Cameron. Sorry! Yes I meant to reply to your post. I was agreeing with your comment and using Bill Miller as another example of long runs of luck. Apologies - I wasn’t clear!
Right ok I see my bad, to be honest I’m not willing to take a stance on saying historical performance is just luck, skill, levered-beta or understanding of a particular market phase. I think the truth probably lies somewhere in the middle but I I’m more confident in saying that in general chasing historic returns doesn’t lead to get great outcomes for investors.
SMT is very different to an individual stat manager - they have a team of people across BG who contribute ideas and do not make any quick trades. Also don’t forget that BG is a partnership therefore all staff benefit when the company does well unlike some fund companies and banks where the managers don’t have skin in the game.
All true. Nevertheless anyone that has worked at a fund manager or investment group will tell you that the big name individual managers elsewhere are always heavily supported by a huge team. In fact and very obviously most of the work will be done by that team.
This is no different to SMT that for a long time has marketed Anderson and Slater.
I was thinking specifically about SMT.