Scottish trusts secure spots in top ten for investor returns
Strong gains from shares in businesses such as jewellery retailer Watches of Switzerland and car dealer Motorpoint contributed to the performance of the Abrdn UK Smaller Companies Growth Trust, whose investment team is led by veteran fund manager Harry Nimmo.
Baillie Gifford’s Scottish American trust, which returned 20.5 per cent, came in at eighth in the table compiled by investment website Morningstar. The Montanaro European Smaller Companies Trust was in first place with a gain of more than 33 per cent.
Outside of the top ten, the Aberdeen Standard Equity trust was 13th (up 18.4 per cent). Baillie Gifford’s Scottish Mortgage trust, which had been top in 2020 with stellar returns of more than 100 per cent, was in 21st place in 2021 with a 12 per cent increase.
The Edinburgh Worldwide trust, which was 2020’s second-best performer, was one of the last year’s worst performers in the table with a loss of 17 per cent.However, Morningstar stressed that it has a strong long-term track record with annualised gains of 24 per cent over five years.
The investment website also said many global stock markets hit record highs in 2021, despite the volatility caused by a new coronavirus variant at the end of the year. “Active fund-managers have largely prospered in this environment, beating the market in many cases,” it said.
Additionally, it stated that there had been major shifts in markets during 2021, saying: “China was the place to be invested in during 2020 but less so last year, while energy and financial stocks made a strong comeback.
“Trusts invested in 2020’s hot US stocks like Tesla, such as Scottish Mortgage, continued to do well, but couldn’t match that year’s astonishing performance. In general, smaller companies and European trusts outshone those focused on Asia and emerging markets.”
In its latest annual report, the managers of the Abrdn UK Smaller Companies Growth Trust said they were positive about the outlook. "Small- and mid-cap stocks tend to lead a market recovery. Companies in our portfolio are reporting strong results, which is driving earnings upgrades,” they said.
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