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One of the UK’s largest in­vest­ment trusts, Scot­tish Mort­gage (SMT), has sounded a down­beat tone about mar­ket con­di­tions and ques­tion­ing the fu­ture up­side from the tech gi­ants which have fired its per­for­mance so far in 2017.

The £6.4bn Bail­lie Gif­ford fund, run by James An­der­son and Tom Slater, has sub­stan­tial holdings in the likes of Ama­zon, Face­book, Google-owner Al­pha­bet and Chi­nese in­ter­net gi­ants Alibaba, Baidu and Ten­cent.

In com­ments ac­com­pa­ny­ing first half re­sults (3 Nov), the in­vest­ment trust says An­der­son and Slater ‘have been con­sid­er­ing the fu­ture prospects for all six of these com­pa­nies, ask­ing if they still have the po­ten­tial to be­come a mul­ti­ple of their cur­rent size’.

There was also a com­mit­ment to stick to a longterm in­vest­ment ap­proach even if its in­vest­ments were to fall out of favour and a sug­ges­tion that any mar­ket volatil­ity may well be used as a buying op­por­tu­nity for ex­ist­ing stocks in the port­fo­lio. The em­pha­sis of the fund is on cap­i­tal growth but the div­i­dend has none­the­less been in­creased for the last 34 years. It was ac­knowl­edged that con­tin­u­ing this track record for the March 2018 fi­nan­cial year would likely re­quire the com­pany to dip into its rev­enue re­serves. (TS) DIS­CLAIMER: Edi­tor Daniel Coatsworth has a per­sonal in­vest­ment in Scot­tish Mort­gage

Ama­zon top hold­ing at 7.7% of the fund

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