Edinburgh Worldwide
Investment Trust
A portfolio of ambitious and progressive looking companies.
Edinburgh Worldwide Investment Trust plc (EWIT) entered the Baillie Gifford stable of managed trusts in 2003 as a consequence of Aberdeen’s acquisition of Edinburgh Fund Managers. Since its arrival, the Trust has been ably and successfully managed by Mark Urquhart. Although Mark works within the team responsible for amongst other things, the management of Scottish Mortgage, he gives his trust a different flavour from that served up by Baillie Gifford’s flagship fund. For starters EWIT offers a highly concentrated portfolio investing in about 40 stocks from around the globe. The Trust eschews fixed interest investments and is made up of pure equity holdings. It focuses on growth with no attention given to yield. One might say that EWIT tries to pick global winners and these stocks are quite definitely set in a 5 to 10 year context. No credence is given to past performance as illustrated by indices and asset allocation models.
The companies included in EWIT’s list are those with long-term potential which seek to offer earnings growth in a sustainable and large scale manner well into the future.
Two particular themes jump out of EWIT’s portfolio. Firstly the power of technological innovation to shape commerce and secondly the huge importance of domestic consumer growth within emerging markets. The list of holdings has included some great innovative giants for some time. Amazon, Google and Apple have been joined by Chinese internet companies Baidu and Tencent.
The former is China’s internet search engine while the latter is the country’s online messaging service leader. Both these firms sit astride the two themes of technology and consumer growth. More particular to innovation within the technology sector is Intuitive Surgical which specialises in remote robotic surgery and seems to have considerable market potential given its ability to cut the costs of and improve the efficiency of many surgical procedures.
EWIT favours emerging markets whose domestic consumers are seemingly set to become increasingly active and prosperous during the next decade. In China demand has shifted decisively in favour of the domestic rather than export customer. As a result EWIT has recently included a basket of youthful and ambitious companies with its portfolio moving away from state owned giants. These include Belle - a retailer of Women’s shoes, 3SBio – a biotech company and Noah Holdings - a wealth management company and a play on the growth in rich Chinese individuals.
The theme extends to Turkey and India through Garanti Bankasi and HDFC respectively. Both of these companies are banks who should benefit as their domestic customers increase in terms of wealth and financial sophistication.
An emerging market where EWIT for the moment places more emphasis on its outward looking face is Brazil. Vale remains a core global resource holding while the rail operator America Latina Logistica is included. Railway development is seen as instrumental in Brazil’s continued export growth improving logistical efficiency and taking market share from road transportation. EWIT invests in a list of ambitious and progressive looking companies. It does so with long term horizons so shareholders should expect volatility. However if an investor is prepared to be patient for at least five and preferably ten years or more he or she could be taking part in an exciting and prosperous future.
Standardised past performance to 30 June each calendar year.
The value of shares and any income from them can fall as well as rise as a result of both market and exchange rate movements. Investors may not get back their original investment. The Trust invests in emerging markets which could encounter dealing, settlement and custody difficulties more than the main international markets. The Trust borrows money to finance further investment (known as gearing), which carries a risk of loss to the Trust. Market values for securities which have become difficult to trade may not be readily available, and there can be no assurance that any value assigned to such securities will accurately reflect the price the Trust might receive upon their sale. The Trust’s concentrated portfolio and longterm approach to investment may result in large movements in the share price. The Trust’s use of derivatives may impact on its performance. As the aim of the Trust is to achieve capital growth you should not expect a significant, or steady, annual income from the Trust. You should note that tax rates and reliefs may change at any time and their value depends on your circumstances. The Trust is listed on the London Stock Exchange and is not authorised or regulated by the Financial Services Authority. This article contains information on investments which does not constitute independent investment research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned. Investment markets and conditions can change rapidly and as such the views expressed should not be taken as statements of fact nor should reliance be placed on these views when making investment decisions.
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