Tech and biotech boom drives Edinburgh trust returns

Tech and biotech boom drives Edinburgh trust returns

Continued strong performance of tech and biotech stocks helped the performance of the £384m Edinburgh Worldwide Investment Trust in the year to 31 October.

Edinburgh Worldwide is managed by Baillie Gifford. It invests in companies at a much earlier stage than Baillie Gifford’s much larger Scottish Mortgage investment trust.

Tom Slater, who jointly runs the Scottish Mortgage trust, has previously said this trust is his only other equity investment, apart from his own fund.

In the year to 31 October, the Edinburgh Worldwide trust returned 43 per cent, compared to a return of 24 per cent for the average trust in the AIC Global sector in the same time period.

The manager of the trust, Duncan Brodie, said 2017 has been a year when markets have been less sensitive to political and economic events and more focused on the fundamental performance of companies, which boosted the returns of his fund.

Mr Brodie said: “Stock market analysis has consistently shown that, in the longer term, company specific fundamentals ultimately prevail, hence our focus on stock selection and structural growth opportunities.”    

Alnylam Pharmaceuticals, a US listed biotech company that is the largest holding in the trust, was a strong contributor to performance over the year.

Technology company Tesla was another strong performer for the trust, and is a top 10 holding.

The trust also invests in unquoted companies.

A new stock on which the manager is particularly keen is Mulesoft.

Mr Brodie said: “Mulesoft sells software to corporates that helps them to connect their IT assets through the use of application programming interfaces (APIs).

"Historically, patching together disparate pieces of software within a business had required costly specialist system integration and cumbersome point-to-point code. In contrast, APIs have the potential to revolutionise how IT departments operate by enabling faster and cheaper IT integration without compromising integrity and security of the network.

"The opportunity is large and expanding, driven by the proliferation of software and computing devices, and we believe Mulesoft's technological lead is significant.”