Securities Trust of Scotland (STS) has recently undergone a change in investment manager. No longer run by Mark Whitehead and the Martin Currie team, it is now in the hands of Troy Asset Management and will be managed by James Harries. James is lead manager of Troy’s Trojan Global Income Fund and investors should expect STS to follow a similar strategy, though it will ultimately retain its original objective: to achieve rising income and long-term capital growth. James aims to invest in a manner conducive of capital preservation and income growth, through a bottom-up allocated portfolio of global dividend payers which balances quality, growth, and income factors. As we outlined in the Performance section, company analysis is done in collaboration with the broader Troy investment team but for a stock to be included into the strategy it has to fulfil James’s three criteria: durable competitive advantages, attractive business models, and strong management teams. Since the launch of the Trojan Global Income Fund in November 2016, we have viewed its performance as being competitive with that of STS’ previous manager; despite the lack of gearing, the fund has returned 33% while STS generated a NAV return of 36.3%. More importantly we believe James has much better record of downside protection with superior downside risk stats than STS, as we discuss in our Performance section. The dividend of STS has been reset to an expected divided of 5.5p per share, a level that James is confident can be grown progressively through the portfolio’s underlying revenue alone. Since the announcement of a new investment manager, the discount for STS has narrowed and is currently trading on a 0.7% discount.