SCOTTISH American Investment Company has cautioned that the outlook for capital returns from equities appeared modest, but it was bullish about prospects for corporate dividends.

The global equity income investment trust, known as Saints, offered this view as it published results yesterday showing that it had under-performed its benchmark in 2013.

Saints, managed by Edinburgh investment house Baillie Gifford, posted a total return on net asset value of 17% for the year to December 31, 2013, taking into account capital and income.

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It attributed this positive return mainly to the performance of stock markets in the developed economies.

Its benchmark, a 50-50 composite of the FTSE All Share and All World-ex-UK indices, made a greater total return of 21%.

Saints attributed its under-performance of this benchmark to its greater allocation of assets to emerging markets, and its emphasis on securing income well above average yields in equity markets.

It declared that its weighting to emerging markets reflected a view that "the long-term potential here remains considerable".

Saints, which had shareholders' funds of £342m at December 31, is recommending a final dividend of 2.6p-a-share. This makes a total for the year of 10.2p-a-share, up 4.1% on the dividend for 2012.

Looking ahead, Saints chairman Sir Brian Ivory said: "Global economic growth has improved but remains below trend and valuation measures suggest stock markets are not lowly rated.

"This, together with the impact that less supportive monetary policy may have, suggests the outlook for capital returns is modest. However, many companies are very profitable and cash-generative and there is scope for dividend payout ratios to rise."

Sir Brian noted that, after 10 years as manager of Saints, Patrick Edwardson would step aside from day-to-day responsibility for running the portfolio.

Current deputy manager ­Dominic Neary will become manager. Sir Brian said: "Dominic already manages the equity investments, which represent approximately 80% of the portfolio. Patrick will remain closely involved with the management of Saints, particularly with issues of asset allocation."

Saints has decided to change its benchmark to the FTSE All World Index, given its relatively small exposure to UK equities.

Weighing the monetary policy backdrop, Sir Brian said: "In the five years since the 2008 global financial crisis, central banks, particularly in the large developed economies, have provided an extraordinary level of support by maintaining interest rates at exceptionally low levels and pursuing quantitative easing ­policies or, simply put, 'printing money'.

"2013 may prove to have been the high water mark for these ­policies with their strong advocate, the US Federal Reserve, now reducing its bond-buying programme. This change to the investing environment will no doubt present challenges but, for the period covered by this report, there has been a strong gain in net asset value."