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Edinburgh Worldwide Investment Trust: June 2022 update

In this investment trust update, Lead Investment Analyst Kate Marshall shares our analysis on the manager, process, culture, ESG integration, cost and performance of the Edinburgh Worldwide Investment Trust.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

  • Douglas Brodie hunts the globe for small companies with strong growth potential
  • Brodie is prepared to hold onto companies for long periods of time to generate long-term investment growth
  • More recently the trust’s performance has been held back by the value investing style outperforming its growth style

How it fits in a portfolio

Edinburgh Worldwide Investment Trust aims for long-term growth by investing globally in what the management team classifies as ‘immature’ businesses. These tend to be smaller, higher-risk companies focused on innovating and disrupting the status quo. The trust could help diversify an adventurous investment portfolio and complement funds or investment trusts invested in larger companies in the UK or internationally.


Douglas Brodie has been lead manager of the trust since 2014. He’s spent his entire investment career at Baillie Gifford, after joining in 2001, and became a partner of the firm in 2015. Brodie launched Baillie Gifford Global Discovery in May 2011, which is an open-ended fund that invests in a similar way as this trust but doesn’t have the ability to invest in unquoted companies or borrow to invest, known as ‘gearing’. Given the cross-over between the two portfolios we think he’s comfortably able to manage both.

Brodie is supported by two deputy managers, Svetlana Viteva and Luke Ward, who both joined Baillie Gifford in 2012. After working in several teams across the business, the pair joined the manager on the trust in December 2017.

The team has access to over 100 investment professionals at Baillie Gifford. They have eyes in all corners of the market, which is something we think sets them apart when it comes to identifying the companies of tomorrow.


Brodie, Ward and Viteva look for companies with specific qualities to whittle their universe down to a portfolio of around 100. A company must typically be less than $5bn in size to be considered for the trust.

While they invest in small businesses, the managers look for innovative ones with a long runway of growth in front of them. They must have a competitive advantage, which could strengthen over time, and be able to thrive as they get bigger. For certain industries, such as platform technology, they evaluate the opportunity for network effects, where a product or service improves with greater user numbers.

Meeting company management is key to the investment process. Many of the companies in the trust are managed by their founders, which the team believes can be invaluable. Business founders often have the vision needed to continue to grow the company in future.

Brodie only invests a small amount of money when he first invests in a company. If the team’s conviction grows, or if the share price falls significantly so they can invest at a cheaper price, they may invest in more. Individual companies usually make up around a maximum of 3% of the trust each.

Sectors like healthcare and technology are where most opportunities are found. While the trust can invest across the world, including higher-risk emerging markets, around 67% is currently invested in the US.

New investments this year include Expensify, a software company providing expense management systems to other businesses, Progyny, a fertility care provider, and biotechnology firm AbCellera. While the managers are happy to hold on to the companies as they grow into medium-sized or larger companies, they will sell those no longer deemed to be ‘immature’, such as diabetes management provider Dexcom, which was sold from the trust last year.

The trust can invest up to 25% of its assets at the time of investment in unlisted companies (those not listed on a stock market). This was increased from 15% and approved by shareholders at the latest AGM in February 2022. Investors should be aware that investment in unquoted companies is higher risk and they can be considerably less liquid than those traded on established stock exchanges. At the end of April 2022, unlisted investments made up 19.3% of the trust’s assets.

Investors should be aware that the trust can borrow money to invest with the intention of increasing returns (known as gearing) to shareholders. This could magnify losses in a falling market and increases risk. The managers also can use derivatives, which if used adds risk.


This trust is managed by Baillie Gifford, an independent private partnership founded in 1908. It's owned by its partners, including Brodie, who work full time at the firm. This ownership structure means senior managers have a vested interest in the company, and its funds and investment trusts, performing well. This has helped cultivate a culture with a long-term focus, where investors' interests are at the centre of decision making.

Fund managers are also incentivised in a way that aligns their interests with those of long-term investors and could retain talented managers.

ESG integration

Baillie Gifford recognises the risks posed by Environmental, Social and Governance (ESG) issues and uses its position to encourage companies to act in a sustainable way. The company has a dedicated Governance and Sustainability Team, which is responsible for producing ESG research which that challenges and contributes to the investment decision-making process.

The firm reports all its voting decisions and provides rationale in situations where it voted against management, in a detailed quarterly voting report. There is also a quarterly engagement report which details the companies engaged with, and the topic discussed, and further engagement case studies are available on the website. All this information is brought together in the firm’s annual Stewardship Activities report.

The managers don’t exclude companies purely due to ESG factors but where needed they engage with company management with the aim of improving relevant policies, management systems and helping them to consider how ESG factors could impact long-term investment returns.


The ongoing annual charge over the trust’s financial year to 31 October 2021 was 0.66%. Investors should refer to the latest annual reports and accounts, and Key Information Document for details of the risks and charging structure. If held in a SIPP or ISA the HL platform charge of 0.45% (capped at £200 for a SIPP and £45 for an ISA) per annum also applies. The platform charge doesn’t apply if the trust is held in a Fund and Share Account.


Since Brodie took over management of the trust in 2014, it’s grown 117.59%*. Performance has been volatile at times though and, as always, past performance isn’t a guide to future returns.

The trust performed particularly well in 2020. This is partly due to the tailwind provided by its growth style of investing. But the positive news about the effectiveness of vaccines against coronavirus in November 2020 signalled a turning point for markets. Sectors of the market that had suffered in 2020 started to perform better, benefitting value focused funds and posing a headwind to growth focused funds.

High growth stocks, often those with cashflows furthest in the future, have since suffered some of the largest share price falls. Worries about rising inflation and interest rates going up have seen investors be less willing to pay up for companies with high growth potential. This has been a drag on the trust’s performance.

In terms of individual stocks, Ocado has recently been one of the weakest performers. Rising inflation and food prices could reduce demand for the retailer’s products as the cost of living increases. The managers remain confident about the company’s prospects though and believe improved technology could help to improve the efficiency of its operations.

Upwork, an online platform connecting businesses with freelancers, also detracted from performance. The company usually makes around 10% of its income from Ukraine, Russia and Belarus, and so was hit by Russia’s invasion of Ukraine. It has since suspended its business in both Russia and Belarus.

On the other hand, investments in companies such as AeroVironment, a drone manufacturer, and Pacira Biosciences, a pharmaceutical business, have performed well. Pacira has seen an uptick in demand as Covid-19 restrictions are lessened and more elective surgical procedures are carried out.

The managers’ growth style of investing aims to benefit from investing in exceptional growth businesses and holding them for long enough to reap the rewards. This can lead to periods of volatility though, and performance will look quite different from peers and the broader global market at times. A trust like this should be held as part of a well-diversified investment portfolio and be held for the long term. Investments rise and fall in value, so investors could get back less than originally invested.

Annual percentage growth

May 17 – May 18 May 18 – May 19 May 19 – May 20 May 20 – May 21 May 21 – May 22
Edinburgh Worldwide Investment Trust PLC 42.30% 2.39% 35.15% 37.04% -46.25%

Past performance is not a guide to the future. Source: *Lipper IM to 31/05/2022.



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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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