With analysts confident that we’ll (finally) get the first of several interest rates cuts this summer, I don’t think it’s any coincidence that the recently set a new all-time high. I also reckon it could be just the start as investors become increasingly willing to back previously-shunned . Ready to fly One example of a top-tier member that might soar if/when interest cuts are announced is ( ).
Despite rising 30% in the last 12 months (no doubt helped by having a good dollop of its assets invested in ), the Baillie Gifford-run fund is still roughly 40% below the all-time high hit back in November 2021. I believe it will eventually recover this ground and then some. One reason for this is that the fund is heavily focused on owning the sort of stocks that could deliver explosive returns .
That last bit is key. In their formative years, growth companies usually require cash — in the form of debt — and lots of it. As a rule of thumb, debt is anathema to investors in a high interest rate environment.
But this burden becomes easier to service as rates fall, hence why I’m so bullish. Still great value It’s not quite a slam dunk though. An ongoing concern I have is that Scottish Mortgage is overly-invested in private companies.
These are harder to value in the conventional sense. So, there’s a chance that the trust has overpaid to get exposure. On a more optimistic note, getting in early could prove to be a masterstroke if (and that’s a whopping ‘if’) some of th.
