Scottish Mortgage NAV grows, Nvidia investment proves fruitful

23rd May 2024 09:10

(Sharecast News) - Investment trust Scottish Mortgage said on Thursday that its net asset value had grown in the twelve months ended 31 March, as its investment in chipmaker Nvidia helped boost earnings despite trading in what it called a "challenging" year.

Scottish Mortgage delivered a share price and net asset value return of 32.5 % and 11.5%, respectively, principally due to the performance of its two largest investments - Nvidia and ASML.

"Demand for Nvidia's chips has vastly exceeded expectations, which has been an important driver of our returns. Without Nvidia's silicon or software, we would not be seeing such remarkable progress from AI systems," said Scottish Mortgage.

The FTSE 100-listed trust's full-year performance meant it saw a narrowing of its share price to NAV discount from 19.6% to 4.5%, after hitting a mid-year low of 22.7%.

Net returns after taxation came to £1.37bn compared to a loss of £2.92bn in the prior year, while total assets came to £14.1bn.

Scottish Mortgage noted that at the end of the year, gearing was 11%, down from 14% a year earlier, and also highlighted that the average interest rate cost of its debt remained low at 3.18%. It also recommended its total dividend payout be hiked by 3.4% to 4.24p per share.

As of 0905 BST, Scottish Mortgage shares were up 1.72% at 885.0p.

Reporting by Iain Gilbert at Sharecast.com