Securities Trust of Scotland > About Us
About Us
About Us

Investment Process

In managing the Trust, we tend to avoid cyclical and highly capital intensive companies, in favour of those exhibiting more defensive characteristics, and so usually has a low beta or sensitivity to market moves. Our investment style is such that while our performance may look sluggish in strongly rising markets (often led by cyclical companies), we believe that a portfolio that suffers fewer destructive draw-downs will be in a better position to compound returns over the long run.

The investment approach is to create a concentrated portfolio of these high quality companies, purchased at attractive valuations and held for the long-term. Portfolio turnover is typically low - we think like owners and buy equities to access the long-term future of a business. We want our investments to compound in value steadily over time.

At Troy Asset Management, we try to keep the investment process as simple and intuitive as possible. We only invest in those companies that we feel we thoroughly understand and that we believe have enduring qualities that will allow an investment to compound in value over the long term. We aim to own and not trade investments, so we have to be confident in the ability of a business to deliver growing cash flows into the future.

Troy has a rigorous focus on quality. We invest in businesses with high returns on invested capital which we consider to be sustained by durable competitive advantages. We favour stable and growing companies with a strongly differentiated product or service that new or existing rivals struggle to copy. These are companies with low risk to their earnings that permit sustained high levels of profitability. We pay particular attention to how management allocates capital and typically avoid highly acquisitive and indebted companies.

Having identified companies that meet our quality criteria, we consider making an investment only when, in our view, three further conditions are met: first, their balance sheets are soundly financed so that management can allocate capital flexibly; second, they are managed by people that act in the best interests of shareholders; and lastly, when their shares are quoted at a price that underestimates future cash flows.

Our History

Troy Asset Management Limited was appointed Investment Manager of Securities Trust of Scotland in November 2020. The Trust was formerly managed by Martin Currie since its launch in 2005.


  • 2005
  • 2020
Investment Objective & Policy

Investment Objective

The Company’s objective is to achieve rising income and long-term capital growth through investment in a balanced portfolio constructed from global equities.

Investment Policy

The Company’s policy is to invest primarily in global equities. The majority of the Company’s portfolio is invested in large capitalisation companies (defined as companies with market capitalisations over £1 billion). The resulting diversified portfolio of international quoted companies is focused, typically containing between 30 and 50 high conviction stocks selected on the basis of detailed research analysis. The equity portfolio consists of listed shares and is diversified across a range of holdings.

The Manager has unconstrained discretion to select stocks except that:

- no more than 10% of the company’s gross assets may be invested in listed investment companies (including UK listed investment trusts);

- the Board must approve in advance all investments in investment schemes which are sponsored by the Investment Manager;

- the sum of all holdings over 5% of the total portfolio must not exceed 40% of the portfolio;

- no more than 15% of the total portfolio can be invested in collective investment schemes, of which no holding can exceed 10% of the value of the collective investment scheme; and

- warrants cannot exceed 5% of the total portfolio.

The Company’s exposure to listed equities is set within a range of 90% to 120% of shareholders funds’ in normal circumstances.

The Company’s active portfolio management strategy will inevitably involve separate periods where, at different times, the Company’s portfolio outperforms and underperforms the market as a whole. The Company’s investment performance (on a total return basis) is measured against the median of the peer group on a rolling three-year basis. The peer group consists of the AIC Global Equity Income sector combined with actively managed ICVC, SICAV or OEIC funds from Lipper Global - Global Equity Income sector. Performance is measured against the median of this peer group. 

As an investment trust, the Company is able to finance its operations through bank borrowings (gearing). The Board monitors such borrowings (gearing) closely and takes a prudent approach. Gearing levels are discussed by the Board and Manager regularly and monitored at every Board meeting. Gearing is limited to 20%.

As a closed-ended investment fund whose shares are admitted to the Official List under Chapter 15 of the UKLA Listing Rules, the Company is required to obtain the prior approval of its shareholders to any material change to its published investment policy. Accordingly, the Company will not make any material change to its published investment policy without the approval of its shareholders by ordinary resolution. The Company will announce any such change through a Regulatory Information Service.

Why Securities Trust of Scotland?

The Board of Securities Trust of Scotland have a wealth of experience in the financial services industry and, having selected Troy Asset Management Limited as investment manager to the Trust, are confident in their ability to achieve the investment objective of the Trust.

Experienced Team

The Trust is managed by James Harries and Tomasz Boniek with the support of Troy’s wider Investment Team.  James is the Fund Manager responsible for Troy’s Global Income Strategy. He has 23 years’ investment experience, and has managed global equity portfolios since 2002. 

Joining Troy in 2016 to establish the Trojan Global Income Fund, James was previously a Fund Manager at Newton Investment Management where he established and managed the Newton Global Income Fund. He was also the alternate manager on the Newton Real Return Fund. Under James’s management, the Newton Global Income fund grew to c. £4.5bn in AUM and was first in its sector over 10 years. Tomasz Boniek has been working alongside James on Troy’s Global Income Strategy since 2017.  Click here to see further information on the team.

Strong Long Term, Risk-adjusted Returns

Our focus is on the ability of the portfolio to generate strong risk-adjusted absolute returns over the long term and sufficient free cash flow to underpin an attractive level of income that grows in real terms. Click here to see the Trust’s performance over time. 

Reliable Income

The Trust is invested to produce a return which is a combination of sustainable income and capital growth.

Below Average Volatility

The protection of investors’ capital is central to Troy and the Trust's ethos. We do not generally aim to achieve this by derivative protection; rather our approach is to protect through the selection of high quality companies, with particular attention paid to the downside risk of any investment. 

Discount Control Mechanism

The Trust operates a discount control mechanism. Excess supply/demand of shares in the market is met by the Trust, which is committed to buying back/issuing stock in order to prevent the Trust's shares from trading at anything more than a minimal discount/premium to NAV. We believe that no investor should be forced to buy at a material premium or sell at a discount to NAV. Click here find more.

Enhanced Liquidity

The DCM also increases the liquidity of the Trust. Subject to certain required shareholder approvals, the DCM has the potential to provide for near unlimited secondary market liquidity for investors.

Oversight of the STS board

The Trust has an independent board comprising five directors. Independent boards are a unique advantage of investment trusts and provide an additional layer of oversight and governance for investors.

Troy’s Structure and Culture

Troy’s independent structure, strong governance, culture and alignment of interest with our investors are the foundations of the Trust's strengths, which are:

  • Our distinctive investment approach and the discipline and patience we have to practice it throughout the investment cycle.
  • The quality of our in-depth primary research, which underpins our approach.
The Board
John Evans
Independent Non-Executive Director - Chairman
Mark Little
Independent Non-Executive Director - Chairman of the Audit Committee
Sarah Harvey
Independent Non-Executive Director - Chairman of the Marketing and Communications Committee
Angus Cockburn
Independent Non-Executive Director 
Alexandra Innes
Independent Non-Executive Director 
Investment Managers
Francis Brooke
James Harries
Investment Manager
Hugo Ure
Tomasz Boniek
Assistant Investment Manager