SCOTTISH Mortgage Investment Trust cited "very obvious risks" in the world as it announced it had outperformed its benchmark marginally in the year to March 31, writes Ian McConnell.
The trust, which is run by James Anderson and Tom Slater of Edinburgh investment house Baillie Gifford, recorded a total return on net asset value of -0.1 per cent. Its benchmark, the FTSE All-World Index, posted a total return of -0.5 per cent in sterling terms.
Over five years, Scottish Mortgage has achieved a total return of 71 per cent, much better than the corresponding figure of 48 per cent for its benchmark.
Scottish Mortgage chairman John Scott said: "The board acknowledges that there are some very obvious risks in the world, be they political in nature as countries negotiate their future relationships; or economic, as much of the world struggles with low growth, zero interest rates and a radically different supply-demand balance for fossil fuels. I will confine my comments on 'Brexit' to noting that, by the time we meet in Edinburgh at the end of June, the result will be known."
He added: "There are many threats out there and your board spends a great deal of its time thinking about risk and trying to understand how well diversified our portfolio really is. We also have a suspicion that the real hazard is what one American politician tried to articulate as the 'unknown unknowns'."
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