London, UK, 14 December 2021

Edison issues update on Securities Trust of Scotland (STS)

Securities Trust of Scotland (STS) has been managed by James Harries and Tomasz Boniek of Troy Asset Management (Troy AM) since November 2020, when the board passed this mandate to Troy AM. The fund is structured and managed to produce consistent compounded returns with below average market volatility throughout the cycle. Troy AM's cautious approach has resulted in a steady mid-term performance. Since launch in November 2016, the Trojan Global Income Fund (STS's strategy, launched and run by James Harries) produced an annualised total return of c 9%, supported by a resilient income stream (2.6% yield).

Over the past 12 months to end-November 2021, STS delivered on its target to preserve and grow capital consistently, supplemented by a steady yield. Its 13.0% NAV total return (TR) was closer to the MSCI World High Yield Index (16.9%), which we perceive to be a better comparison in assessing STS's performance than the MSCI World Index (25.5%), given the fund's relatively high income. Owing to its conservative strategy, STS lagged growth-style peers, which rallied during the past 12 months. STS is trading at a 1.6% cum-fair discount, close to its three-year average discount of 2.3%. The managers' intention is to generate a strong performance for the trust to trade at a premium, issue shares and grow the size of the trust. Troy AM has succeeded in executing a similar strategy in relation to two other trusts since being appointed. It has grown shareholder funds in Personal Assets Trust from £149m in October 2008 to £1.7bn in November 2021 and in Troy Income & Growth Trust from £47m in 2009 to £253m in November 2021.

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