THE manager of the venerable Scottish Investment Trust has said there is a future for bricks and mortar retailers amid the mayhem on the high street as he suggested lots of technology stocks are over-valued.

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Alasdair McKinnon defended the decision to maintain a relatively big exposure to the retail sector at the general meeting of the £760 million trust, arguing consumers will always enjoy visiting stores even as internet use surges.

He said while UK stocks look unloved in a global context amid the uncertainty about Brexit, the trust is happy to remain invested in retailers who are focused on the country such as Tesco and Marks & Spencer. The prospect of the UK leaving the European Union next month has not made the trust less likely to invest in the UK.

Held in Edinburgh, the 131st AGM of the trust followed a period in which the problems suffered by big names such as House of Fraser have highlighted the pressures resulting from factors such as the rise of online retailers and growing consumer caution. House of Fraser was bought by Mike Ashley in August after entering administration.

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However, Mr McKinnon said: “A number of physical retailers with good cash flow and strong balance sheets will survive and prosper, especially if populist politicians put money in people’s hands.”

He noted that many people search for products online then have a closer look in stores in which they also collect orders placed on the web and return goods.

Stock market investors appear to have written off the sector without distinguishing between likely winners and losers.

“The stocks are very unpopular. Valuations are pricing in doomsday scenarios.”

Tesco tops the list of the 25 biggest holdings of the self-managed trust, which is run by a team based in Edinburgh and prides itself for taking a contrarian approach.

Speaking after the meeting, Mr McKinnon said the poor economics of the grocery delivery business would offer physical stores an advantage over net rivals.

However, the fashion for investing in the technology sector meant sky-high valuations had lost touch with economic reality, with many firms that are building big customer bases still losing money.

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“People think these will be the next Google but Googles are one in a thousand,” he said.

Around a quarter, 26.2 per cent, of the trust’s assets at January 31 were accounted for by UK stocks. That compared with 13.8% for Europe excluding the UK and 31.8% for North America.

While many UK-listed firms have extensive international operations, the trust has also remained invested in domestic businesses such as British Land. Mr McKinnon said the fact other investors have been selling shares in UK-focused firms could create opportunities to buy at attractive valuations.

Noting that negotiations between the UK and the European Union have dragged on until at least the eleventh hour before, Mr McKinnon expressed optimism that an amicable resolution could be reached regarding Brexit

“The trust’s chairman, James Will, defended its directors’ remuneration policy after a shareholder said board members appeared to be being paid very well to attend meetings.

Directors fees increased in the year to October 31, for the first time since 2013. Mr Will’s rose to £60,000 from £50,000.

Mr Will said the fact the trust is self-managed meant directors were required to have much greater involvement than would be the case if an external investment firm looked after the funds For example, he told the meeting, he probably spent 25 full days a year on trust business but was involved in communications on quite a lot of other days.

The directors’ remuneration report was approved by 97.66% of votes cast. The trust’s report and accounts were approved by 99.96% of votes cast.

The trust paid 21.2p regular dividends per share for the year to October, increasing the payout for the 35th year running.