Scottish Mortgage Trust boss Anderson ‘terrified’ of Brexit and Trump’s chaotic implications

The falling value of the pound against the dollar may have helped the Scottish Mortgage Investment Trust to post a 25 per cent increase in net asset value (NAV) and price per share in the six months to September 30, but that has not stopped its guiding force from condemning the UK’s decision to leave the EU and fearing the consequences of a Trump-inspired politics.

James Anderson, who runs the £4.7 billion Trust with Tom Slater, said Brexit will shut Scotland’s, and the UK’s, corporate sector off from the best talent Europe has to offer.

His Trust currently has 21.8 per cent of its assets invested in Asia, with 19.7 per cent in firms in China. Of the 28.6 per cent of assets it had invested in Europe, only 4.4 per cent were in UK companies.

And speaking on the implications of the momentous decision to leave the EU and the uncertainty of Brexit, Mr Anderson said: “From the investment point of view, from the creation of companies point of view, I think it is deferring decisions, and the anti-immigrant policy is, or effective policy … is possibly the worst thing you can do for the long-term future of the British corporate sector.”

On whether the investment world needed clarity on the UK Government’s Brexit strategy, Mr Anderson said: “Absolutely.

Scottish Mortgage’s NAV increase of 25 per cent compared with an 18 per cent rise in its benchmark FTSE All World Index over the period.

It has investments in 67 companies, with a tendency to favour tech enterprises, such as Alibaba, electric car maker Tesla, Facebook and Google parent Alphabet. Its biggest investment is in technology giant Amazon, in which it holds 10.8 per cent of its assets.

With nearly half (48.7 per cent) of its assets invested in North America, Mr Anderson offered a similarly gloomy assessment of the consequences of a Trump victory in tomorrow’s US election as with Brexit.

Describing a result that sees the celebrity move into the White House as Mr Anderson said such a scenario was “very, very dangerous” and “potentially disastrous”.

Speculating on the long-term implications of a Trump victory, Mr Anderson said: “I don’t think it will ultimately change the management, the vision, the prospects of the type of company we invest in,” he said. “But I do think it makes the future of America as a country, as a currency, as a ruling, challenging.”

He added: “In the long run I think it is very, very dangerous.

“I trust the companies in which we invest to do a better job of opposing it and coping with the ramifications than almost every other set of companies because I think it is potentially disastrous.”

Addressing the wider implications within such a prevailing environment, Mr Anderson said: “I think there is a grave danger that an average saver working hard to build a pension for the long run gets completely the wrong side of this, because as we saw at Brexit there is this immediate panic out of markets which I don’t think helped anybody.

“But I think if one is trying to think of the next 10 years it is impossible to exclude politics of the type we are seeing now – the populism, the racism, the sexism. The opposition entity, much more to education and experts I think is terrifying.”

Mr Anderson said the volatile nature of politics in the UK and the US now demands that investment trusts ensure a global balance to their portfolios.