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Scottish Investment Trust performance slips 0.5% in first half

By BFN News | 07:22 AM | Monday 17 June, 2019

Scottish Investment Trust said its performance slipped in the first half of its financial year. The company's net asset value total return for the six months through April fell 0.5%. Scottish Investment Trust said that although it did not have a specific benchmark, the total return of the international MSCI All Country World Index was positive 7.2%, while the UK based MSCI UK All Cap Index total return was positive 6.0%. 'This period proved a less fruitful time for contrarian investors. Our contrarian approach seeks to find an appropriate balance between risk and reward in all our investments, rather than attempt to ride every wave of investment fashion,' the company said. 'The manager believes a prolonged period of excessively cheap money has, once again, encouraged an increasingly reckless attitude to financial risk.' 'This means that insufficient regard is paid to the cyclicality and valuation of earnings from certain companies that are, currently, perceived as immune to the fluctuations of the economic cycle.' 'This enthusiasm is most ardent for 'disruptive' technology companies which the manager sees as most exposed to share price declines when passions cool.' 'Accordingly, these companies are excluded from our portfolio by choice, despite in many cases their large size, as we see greater opportunity in less fashionable areas of the market.' 'Given our contrarian approach, and as noted in previous communications, we do not expect the company's portfolio to match any particular index return over any defined period due to the nature of the portfolio's composition.' 'Our approach aims to achieve above-average returns over the longer term by which we mean at least five years.' Story provided by

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