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Scottish Mortgage (LSE: SMT) shares carried out properly in 2024. After beginning the 12 months at 808p, they rose to 955p – a acquire of 18% (additionally they paid a small dividend).
Now, as an investor in Scottish Mortgage, I’m fairly proud of that efficiency. Nonetheless, a number of different development funds I’m invested in generated increased returns for me.
Blue Whale Progress Fund
One was the Blue Whale Progress Fund, which is managed by Stephen Yiu. For the 12 months, it returned a really spectacular 28.2%.
Folks typically examine this fund to the Scottish Mortgage Funding Belief. That’s as a result of each merchandise have a concentrate on development shares.
However there are some key variations. One is in relation to the variety of holdings. Whereas Scottish Mortgage has invested in almost 100 corporations, Blue Whale’s invested in lower than 30 companies. So it’s a ‘excessive conviction’ fund (ie Yiu has lots of conviction in his holdings).
One other is that Blue Whale has extra of a concentrate on high quality. Whereas Scottish Mortgage has invested in numerous up-and-coming unprofitable companies, Blue Whale tends to spend money on trade leaders with robust aggressive benefits and excessive ranges of profitability (eg Visa).
Now, as with Scottish Mortgage, the expansion focus right here can result in volatility at occasions. When tech shares fell in 2022 as rates of interest rose, this fund underperformed.
I’m snug with the volatility although. Since I invested on this fund in 2019, it’s completed rather well for me. And Yiu has confirmed to be a fantastic inventory picker. One of many largest holdings proper now could be Broadcom and it’s flying on the again of the factitious intelligence (AI) growth.
Sanlam World Synthetic Intelligence
One other fund I personal that outperformed Scottish Mortgage in 2024 is the Sanlam World Synthetic Intelligence. I don’t have the precise return right here because the December factsheet hasn’t been printed but, however Hargreaves Lansdown’s web site says it returned 27.45% for the 12 months to 31 December 2024.
This fund’s centered particularly on AI, a scorching funding theme in 2024. On the finish of November, the highest 5 holdings have been Nvidia, Amazon, Microsoft, Alphabet and Tesla. And all of those shares generated double-digit returns in 2024.
Given its area of interest focus, I see this fund’a threat stage as fairly excessive. If AI shares lose their enchantment, this fund is prone to underperform. I personally consider that the AI story is simply getting began although. So I plan to maintain this fund in my portfolio for some time.
I’ll follow Scottish Mortgage
Going again to Scottish Mortgage nonetheless, I plan to stay with the belief. That’s as a result of it offers me one thing totally different. Not solely does it present publicity to extra obscure listed corporations reminiscent of e-commerce powerhouse Mercadolibre and funds specialist Adyen, however it additionally offers me publicity to some actually thrilling unlisted corporations reminiscent of Elon Musk’s house enterprise SpaceX (about 5% of the portfolio).
I’ll level out that I see this product as the very best threat of the three talked about. This is because of the truth that it’s invested in lots of unprofitable and/or unlisted companies.
So I’ve sized it appropriately. If it does expertise some volatility, my portfolio gained’t be badly impacted.
