The technological catastrophe in the United States affects the Scottish mortgage investment fund, as the value of the affected hit fund falls in double digits

The Scottish Mortgage Investment Fund, one of the most popular funds in the London stock market, has suffered a double-digit decline in value after a bloodbath in US technology stocks.

The Edinburgh-based company considers major US technology giants such as Tesla, Amazon and Nvidia to be some of the largest holdings in its portfolio.

Its value rose during the pandemic, attracting large numbers of supporters among UK retail investors, who are estimated to make up 75 per cent of its shareholder base.

Technology confusion: Scottish Mortgage Investment Trust considers major US technology giants such as Tesla, Amazon and Nvidia to be some of the largest holdings in its portfolio

But stock prices in the sector have fallen sharply in recent months as fears of inflation, rising interest rates and disrupting supply chains have damaged confidence in the ability of technology firms to sustain growth.

Concerns have been confirmed by dim results that have led to a drop in the value of companies including Amazon, Netflix and Facebook owner Meta.

In particular, Tesla has struggled to cut 40 percent this year. Those declines affected Scottish Mortgage, which said its asset value had fallen 13 percent for the year to the end of March, well below its benchmark, the global FTSE index, which rose 12.8 percent.

It also posted a loss for the year of £ 2.5 billion compared to a profit of £ 9.2 billion a year ago.

The losses come when stellar fund manager James Anderson left the company. The price cut cost the 113-year-old fund its position as the largest investment trust in the UK, it was replaced by 3i Group.

Shares fell 2.4 percent, or 18.4 pensions, to 760 pence yesterday, as investors were also concerned about management comments, especially in China, where the company acknowledged it had become too much to invest.

Scottish Mortgage has investments in Chinese e-commerce giants Alibaba and Tencent.

Scottish Mortgage chief executive Tom Slater said: “Investors in Chinese companies have suffered from President Xi’s regulation in the name of‘ common good ’.

However, he also said that most of the firms in the company’s portfolio had achieved “exceptional growth in two years”.

Tracy Zhao of Interactive Investor said the recent fall in the fund’s stock price has become an “attractive entry point” for those looking to go for the long term.


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