Scottish Mortgage Investment Trust’s top holding is now Tencent
Scottish Mortgage Investment Trust (LON:SMT) confirmed that it sold 80% of its Tesla holding over the past 12 months, as well as selling-off a number of Silicon Valley tech stocks, the Financial Times reported today.
The UK’s largest investment trust also increased its exposure to China.
By the end of March, Tesla was its fifth-largest holding, down from second the year before, as Scottish Mortgage cashed in on its investment.
The trust’s co-manager Tom Slater commented on the decision to remove Tesla from its portfolio:
“The value that Tesla has created by addressing the need to decarbonise has forced a hostile investment community to reconsider its position. Tesla has become one of the world’s largest companies as its highly-rated products have continued to improve, along with its ability to manufacture them at scale,” Slater said.
“Other companies are now following, and history tells us that the more generous funding environment that has ensued is a prerequisite for further progress. Over the course of the year we sold around 80% of our Tesla shares as we strived to maintain appropriate diversification and to focus on the long term return potential.”
Baillie Gifford’s flagship trust revealed that its net asset value (NAV) per ordinary share increased by over 111% for the year ending in March, compared to a rise of 39.6% in the benchmark FTSE All-World Index.
The trust’s top holding is now Tencent, the multinational technology conglomerate holding company, as well as food delivery company Meituan, as it increased its exposure to China.
“The pace of innovation at scale in China now exceeds anything we can find in the rest of the world. Pinduoduo was founded in 2015 and has already overtaken Alibaba’s audience size in online commerce with more than 750m users. Meanwhile, the world’s most valuable private startup, ByteDance, dominates China’s online advertising landscape less than a decade after its founding,” Slater said.
The trust has sold its shares in Facebook and Google’s parent company Alphabet, as well as cutting its stake in Amazon.
It was confirmed in March that James Anderson, who manages the trust alongside Tom Slater, will step down in April 2022 after nearly 40 years at Baillie Gifford.
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