Scottish Mortgage has reaped returns of 419% from its unlisted companies since it started adding them to its portfolio in June 2010, with Chinese tech company Alibaba leading performance.
The returns include companies that have gone public and remained in the portfolio.
Over the same period, the entire Scottish Mortgage portfolio returned 344% while the FTSE All Word index returned 163%, the latest half-year report said.
Lead fund manager James Anderson (pictured) and his deputy Tom Slater reckoned enough data had emerged over the last eight years to draw overall observations of this part of the portfolio. Previously, the pair had only made public statements on individual unquoted holdings.
Alibaba delivers while Skyscanner disappoints
Alibaba is one of the big successes from the £7bn investment trust’s unlisted part of the portfolio delivering total holding period return of more than 1,000%, while Swedish streaming business Spotify highlights a European success delivering almost 300%, the report said.
Alibaba represents 5.7% of assets while Spotify represents 2.5%.
However, the managers said Hellofresh, which makes home delivered meal kits, and online furniture retail Home24 had delivered disappointing returns. Both are relatively small holdings, representing 0.5% and 0.3% respectively.
The investment trust held Skyscanner from 2015 to 2016 before it was sold meaning returns were capped at 40%. Takeovers also limited upside in pet food retailer Chewy and health business Flatiron.
Scottish Mortgage outperforms in H1
The investment trust almost doubled the returns of the index in the half-year results for the period to 30 September 2018.
Scottish Mortgage returned 22.4% compared to the 11.3% returns in the FTSE All World index. The net asset value rose 19% over the period.
However, the results finish just before the October sell-off when the US trade war with China and rising interest rates unnerved investors. Scottish Mortgage was one of the worst performing investment trusts in the first 11 days of the month.
The investment trust has dropped to fourth quartile over one and three months, according to Trustnet, falling 12.4% and 9.9% respectively, compared with 7.2% and 6.9% loses in the Global investment trusts sector. In contrast, the closed-ended fund is top quartile over one, three and five years.
It is currently trading on a small premium of 0.9%, according to the Association of Investment Companies (AIC).
Baillie Gifford director of retail marketing and distribution James Budden has previously said investors should buy the trust with a five-year plus time horizon in mind. Over that period, the fund has returned 152.1% compared with 74.1% in the sector.
