Charitable trust’s reserves ‘rebound’ £70m after Covid slump

Shetland Charitable Trust.

Shetland Charitable Trust’s reserves grew by more than £70million in three months due to a “rebound” in the financial markets, which had collapsed following the outbreak of Covid-19.

The value of the SCT’s reserves stood at £389 million at the end of June, having grown £73.3m in the previous three months.

Presenting the investment report at today’s (Thursday)  trust meeting, executive business manager Raymond Mainland said the growth meant the trust was back where it would have expected to be at the end of March, had Covid-19 not struck.

He said the markets had declined by around 30 per cent in the last month and a half of the 2019/20 financial year. 

Although the first three months of the year had seen a rebound in the investments market around the world, Mr Mainland said the next six months remained “very uncertain”.

Speaking earlier in the meeting, he  said: “It’s fair to say it’s an extremely volatile market and I think the next six months will be quite challenging.”

Mr Mainland said the ongoing Covid-19 crisis together with the effects of Brexit and the US presidential election would likely make for a “very uncertain period”.

“It would be perfectly possible that we see a similar problem that we saw in February and March,” he added.

Speaking after the meeting, trust chairman Andrew Cooper said: “It’s been a positive three months and good to see the funds climbing in the right direction again.

“But we are essentially just back to where we were pre-Covid-19.

“The markets are particularly prone to volatility in these challenging times and we can see the value
of investments drop significantly in the space of a few days.

“The trust takes the long view on its investments, gauging their success over years rather than months.

“Our aim is to grow the funds for the future of all islanders while providing sufficient returns each year to spend in a sustainable way in the community.” 

The recovery was largely down to the success of the trust’s biggest fund manager Baillie Gifford.

Many of the companies in its portfolio of stocks have seen accelerated growth during the virus crisis.

Baillie Gifford returned 42.1 per cent over the three months. 

Since it began in 1976, the trust has paid out almost £330m to improve the quality of life for people in Shetland.

Priorities have remained the support of services to people in need, the elderly, children and young people, as well as contributing to maintaining and developing Shetland’s environment.

Most of the £8.2m of grant funding for 2020/21 will help fund local charities, including large bodies such as  Shetland Recreational Trust, Shetland Amenity Trust and Shetland Arts Development Agency.