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Winterflood: Buy Scottish trusts in event of independence

Alice Rigby
Written By:
Alice Rigby
Posted:
Updated:
12/09/2014

Investment trust analysts at Winterflood Securities have marked Scottish investment trusts as a buying opportunity should the country vote ‘yes’ to independence.

In a report released yesterday, Winterflood noted that  discounts on Scottish trusts will probably widen in such an event, given investors’ concerns over the immediate legal and fiscal issues facing an independent Scotland.

But Winterflood is confident that “any short term fears would be negated”, given that these problems were likely to be resolved for most trusts through relocation or favourable policy from a Scottish government.

“We would regard [the widening of discounts] as a buying opportunity on the basis that any short term fears would be negated,” Winterflood said.

However, it follows a separate note issued by the broker earlier this year in which it acknowledged the process of relocation, if undertaken, could involve significant adminstrative costs.

Forty-one investment trusts currently operate from Scotland, including two of the largest funds in the sector, Scottish Mortgage  and Alliance Trust. With £22.6bn of assets, Scottish investment trusts represent almost 20 per cent of the investment trust sector in the UK.