Scottish Mortgage is no longer Britain’s favourite investment

Scottish Mortgage has lost its position as the top holding in thousands of DIY investors’ portfolios after the technology-heavy investment trust suffered one of its worst quarters.

A painful sell- off in global technology stocks has hurt Britain’s largest investment trust: its share price fell by 23pc in the first three months of 2022. The £14bn trust’s slump in value has led some investors to prefer its rivals.

Customers aged under 24 now count rival Alliance Trust as their top holding, according to the broker Interactive Investor. Alliance also holds leading technology stocks such as Google parent Alphabet and Microsoft. The trust has fared better through recent market falls, dropping only 4pc in the first three months of the year.

Meanwhile, the largest position among those aged 35 to 44 was the electric car maker Tesla. The stock has also suffered, losing a 10th of its value in the first quarter, but has returned a dizzying 1,578pc in five years.

Older investors between the age of 45 and 54 preferred the £ 26bn

Fundsmith Equity fund, which has returned 88pc over the past five years under the stewardship of Terry Smith.

However, despite its decline in size, Scottish Mortgage has remained prominent in many investors’ portfolios, ranking among the top five positions across all age groups.

Shares in the trust have risen by 170pc in the past five years, thanks to early bets on some of the fast- growing companies, such as Amazon and Tesla.

Interactive Investor said on average its customers’ portfolios had lost 3.6pc in the first quarter, performing slightly better than professional investors in stocks and bonds, who recorded a loss of 3.7pc.

Wealthy investors’ portfolios have suffered the most. Historically, pots worth more than £1m have performed best, but this quarter they recorded the weakest performance, a fall of 4.2pc. Meanwhile, portfolios worth between £50,000 and £100,000 fell by 3.6pc.

The FTSE World index, which tracks the performance of the biggest global stocks, fell by 2pc in the same period.