EDINBURGH WORLDWIDE INVESTMENT TRUST: Fund with a mission to find pioneers
Fund manager Douglas Brodie heads a global discovery team at investment house Baillie Gifford that looks for companies that are transforming the way business is done in the industries in which they operate. Such “pioneers,” Brodie argues, may prove excellent in the long run. term investments.
The discovery team – currently seven strong – has been together for over a decade and the investment strategy has yielded huge rewards for investors so far.
The two funds it is responsible for – Baillie Gifford Global Discovery and Edinburgh Worldwide – have both built strong investment records and Brodie believes there’s no reason why they can’t move forward, regardless of any market glitches that lurk.
Brodie has led the £2.3 billion Global Discovery fund since its launch in 2011, and has led the £1.5 billion publicly traded investment fund Edinburgh Worldwide for the past seven years. Unsurprisingly, the two investment vehicles have similar portfolios – eight of the two funds’ top ten holdings are the same for both. What sets them apart is that the trust has a slightly lower ongoing cost and also the ability to borrow money cheaply to fund occasional trips to the stock market. As a result, the trust has a superior five-year performance record over Global Discovery – a return of 259 percent versus 207 percent.
“At the heart of what we do is identify companies that use a combination of technology and human ingenuity to drive industry change,” says Brodie. ‘These companies don’t just survive. They act as pioneers and are constantly moving things forward.’
The two funds’ largest holdings include electric car maker Tesla and online grocer Ocado. “I’ve been an investor in Tesla since 2013,” says Brodie. ‘I have lived and breathed the many evolutions and constant challenges of his investment case. But it remains leading, innovating on several fronts. Likewise, Ocado uses technology and software to turn online grocery shopping into a business that can be offered profitably and at scale.”
New holdings made by the investment fund in the past six months include software company JFrog and Sprout Social, which helps companies better manage their social media presence. It has also increased its exposure to space-related stocks with new stakes in satellite manufacturer Astranis Space Technologies and rocket manufacturer Relativity Space.
Brodie says this year has been a “dynamically active period” for the stock markets, with the rise of day traders willing to hire hedge fund managers and the widespread use of Special Purpose Acquisition Companies (Spacs) to buy companies that are then listed on the stock exchange. are noted. the fair.
He describes all this as “foam” and says he would welcome a market shakeout if it took away some investors’ “badly perceived” idea that stocks are a one-way street. “Whatever happens to the stock markets in the near term,” he adds, “I am confident that the technology journey we are on now will not go away. I’m not nervous about that.
‘The application and deployment of technology throughout the industry is here to stay.’
Edinburgh Worldwide has some 110 holdings and nearly two-thirds of its portfolio is invested in the US. It has interests in 11 privately held companies, which represent about 8 percent of the trust’s assets, and its annual ongoing charges are just over 0.7 percent. The exchange identifier is BHSRZC8 and the ticker is EWI.