Scottish Mortgage Investment Trust warned the past financial year had not been “as strong” as recent years as it reported a decline of 0.1 per cent in its net asset value.
The investment trust’s share price was 0.7 per cent lower in the year to March 31 2016 but it confirmed another increase in its dividend by just 1 per cent to bring total payouts to 2.96p per share.
Investments in private or unquoted companies in the portfolio, which Baillie Gifford managers James Anderson and Tom Slater had previously confirmed would be capped at 25 per cent, had reached 12 per cent of the portfolio by the end of March, up from 10 per cent in September 2015.
The trust’s net asset value (Nav) fell to 259.2p from 262.4p in the previous year and when borrowings were taken into account Nav was 263.8p, down from 268p.
Its full-year results revealed a loss of £13.9m on its net return on ordinary activities before tax, compared to a £723.2m profit in the previous year to March 2015.
Income from investments came down from £38.7m in the 2014-15 financial year to £32.7m, the trust reported.
Chairman John Scott said: “I am pleased to say that the Scottish Mortgage portfolio has continued to produce good long-term returns for shareholders. The past financial year, taken in isolation, has not been as strong as recent years, either in terms of the NAV performance or our own share price, but I hope that my earlier statements have been consistent in warning that not every year can be expected to produce the stellar results that we have been fortunate to see in the past.”
Mr Scott also confirmed annual charges had come down again in the most recent financial year to 0.45 per cent, from 0.48 per cent, making them some of the lowest reported in the investment trust sector, he said.
The trust’s chairman did not comment on the upcoming EU referendum, only to confirm the result would be known by the time of the trust’s annual general meeting on June 30 in Edinburgh.
He added: “We believe strongly in two things: first, that passive investing is no longer an adequate approach if investors wish to preserve capital in the medium term - there are simply too many competitive threats to established businesses, many of which will not survive. Secondly, that many of the companies in our portfolio offer the potential for growth based on structural rather than cyclical changes over the long term.”
