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[ BAILLIE GIFFORD ]
Growth stocks have generally fared better than value stocks during
the coronavirus pandemic, helping Scottish Mortgage Investment
Trust during the worst of the stock market falls. Joint manager Tom
Slater explains why
Why this crisis favours
growth stocks
The value of your investment and
any income from it can go down
as well as up and as a result your
capital may be at risk.
Tom Slater, joint manager
of Scottish Mortgage
Investment Trust, has seen
crises come and go. They’ve
mostly led value stocks to outperform
their growth counterparts.
Not this time.
The difference, Slater points out,
is that the crisis had nothing to
do with economic conditions. Its
unprecedented circumstances have
favoured growth companies, forcing
change on existing industries and
causing us to rethink entirely how we
interact.
“If you can’t go out and meet
people face-to-face, then you want
to use consumer internet technology
companies to socialise,” he suggests.
“If you can’t go into the office to
work, then I think the tools of remote
working become really important.
You also see an acceleration of some
of the big trends that have been
driving these changes.”
While acknowledging that some of
the moves and practices may unwind
once normality returns, he is equally
convinced that others will become
more ingrained.
“The video conferencing market
has been tiny for years, because the
“If you can’t go out and meet
people face-to-face, then
you want to use consumer
internet technology
companies to socialise”
TRUSTNET
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