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Edinburgh Worldwide Investment Trust: February 2021 Update

In this investment trust update, Investment Analyst Joseph Hill shares our analysis on the manager, process, culture, 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.

  • 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 capital growth
  • The trust has performed well with many holdings benefitting from behavioural shifts accelerated by the pandemic

How it fits in a portfolio

Edinburgh Worldwide Investment Trust aims to grow capital over the long term 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 to the 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 Brodie is comfortably able to manage both.

He’s supported by two deputy managers, Svetlana Viteva and Luke Ward, who both joined Baillie Gifford in 2012. After working in several different teams across the business, the pair joined Brodie 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 of 30,000 stocks down to a portfolio of around 100 companies. A company must typically be less than $5bn in size to be considered for the portfolio. Whilst small now, the managers are looking for businesses with the potential for a long runway of growth in front of them.

The team looks for some of the world’s most innovative businesses, which could grow over the long term. Companies must have a competitive advantage, which could strengthen over time, and have the ability 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 their 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.

The managers only invest a small amount when they first invest in companies. If their conviction grows they may increase the investment - usually up to around 3% of the trust - or if the share price falls so they can invest at a cheaper share price. Tesla and Ocado are examples of companies that have been held for more than five years and since grown in size.

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 60% is currently invested in the US.

The managers made a number of changes to the trust over the past year. New investments include American Superconductor, a company they believe offers lots of potential within renewable grid infrastructure. They are also enthusiastic about the new generation of businesses emerging from Asia, with Chinese software company, Agora Inc, being added to the portfolio. In contrast, they sold an investment in US takeaway delivery company, Grubhub, due to potential competition.

The trust can invest up to 15% of its assets at the time of investment in unlisted companies (those not listed on a stock market). 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 December, unlisted investments made up 5.2% of the trust’s assets. This included two new investments in Epic Games, the US gaming platform responsible for Fortnite, and Graphcore Limited, the UK computing developer. The managers also added to existing investments in Oxford Nanopore Technologies and Space Exploration Technologies (‘SpaceX’).

Investors should be aware that the trust can borrow money to invest with the intention of increasing returns (sometimes known as gearing), but this could magnify losses in a falling market and increases risk. The managers can also 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 Douglas 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. We think this has helped cultivate a culture with a long-term focus, where investors' interests are at the centre of decision making. We also like that fund managers are incentivised in a way that aligns their interests with those of long-term investors and should retain talented managers.

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 that challenges and contributes to the investment decision-making process. They also monitor companies' progress, engaging with them on ESG matters where appropriate.


The ongoing annual charge over the trust’s financial year to 31 October 2020 was 0.72%. 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.


Performance has been exceptional since Brodie took over management of the trust, returning 360.7%* since January 2014. Remember that past performance is not a guide to the future.

Over the last 12 months stock markets have been volatile at times and sensitive to pandemic news flow. The trust’s performance has been very strong with many of its investments benefitting from the shift to online. A focus on companies with potentially sustainable growth prospects also helped. While growth-style investing has done well in recent years compared to value investing, we think a well-diversified and robust portfolio should include a variety of styles, as different investment styles come in and out of favour, as well as different asset classes and geographies.

Many of the companies held in the portfolio have emerged stronger from the pandemic so far, growing into market leaders in their industries. Wayfair, the online furniture retailer has performed well amid increased customer demand. An online presence also reduces costs compared with traditional bricks and mortar retailers. Other online-based businesses such as Ocado also contributed to performance as consumers have looked for digital solutions to go about their daily lives. Other notable performers included online education provider Chegg, healthcare treatment developer Novocure and Chinese biopharmaceutical company Zai Lab.

All investments can fall as well as rise in value so you could get back less than you invest.

Annual percentage growth
Jan 16 -
Jan 17
Jan 17 -
Jan 18
Jan 18 -
Jan 19
Jan 19 -
Jan 20
Jan 20 -
Jan 21
Edinburgh Worldwide Investment Trust 23.5% 49.9% 9.3% 17.7% 90.4%

Past performance is not a guide to the future. Source: *Lipper IM to 31/01/2021

Find out more about Edinburgh Worldwide Investment Trust including charges

Edinburgh Worldwide Investment Trust Key investor information

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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