fbpx

Scottish Mortgage and Baillie Gifford cash in on som Tesla shares

Scottish Mortgage and Baillie Gifford cash in on som Tesla shares

High-flying fund manager Baillie Gifford has significantly reduced its Tesla share holdings across at least 11 of its funds and investment trusts, inc

ALEX BRUMMER: Selling Arm to Nvidia is a deal too far for Britain 
Martin Lewis explains how to claim back £1,000s from your bank
Bed down for Christmas: Why confine festive decorations to downstairs?

High-flying fund manager Baillie Gifford has significantly reduced its Tesla share holdings across at least 11 of its funds and investment trusts, including Scottish Mortgage. 

The Edinburgh-based fund manager, which was Tesla’s largest external investor with a 7.7 per cent stake as recently as last year, sold off shares during January, This is Money research into the latest factsheets for its 44-strong fund and trust range revealed.

Flagship Scottish Mortgage cut its Tesla holding from 8.4 per cent of the £19.4billion investment trust at the end of December to 5.1 per cent a month later.

This saw Tesla drop from the trust’s biggest holding to its fourth biggest. 

In 2020, despite the hit on businesses caused by Covid, Tesla made half a million new cars

In 2020, despite the hit on businesses caused by Covid, Tesla made half a million new cars

In 2020, despite the hit on businesses caused by Covid, Tesla made half a million new cars

Meanwhile, the £4.9billion Baillie Gifford Global Alpha Growth fund and £1.9billion International funds saw Tesla drop out of  their top ten holdings completely – though it is unknown whether the positions have been entirely sold from the portfolios.

The only Baillie Gifford fund or trust to see no change in its top ten Tesla standing was the £1.3billion Edinburgh Worldwide investment trust, where it remains its largest holding at 6.5 per cent of the trust. However, as Tesla’s shares rose almost 9 per cent in January, it is likely some of its stake was sold.

Tesla’s shares have seen a massive 350 per cent rise over the past year, climbing from $172 on 18 February 2020 to $773 today. 

That has seen founder Elon Musk become the world’s richest man on paper and the electric car maker’s share price is more than ten times higher than the $72 it reached in the coronavirus crash last March.

Baillie Gifford is a long-term investor in Tesla and Scottish Mortgage manager Tom Slater recently commented to This is Money that although the gains looked spectacular now, the trust’s investors were being rewarded for having stuck with the car maker through bumpy times

While not every Baillie Gifford fund has the ability to invest in the US electric car and tech giant, for example those with a UK-only or healthcare mandate, those that can probably do hold it or have done in the past.

Only the top ten holdings of each fund or trust are disclosed on publicly available factsheets, so there may well be more than those listed in the table below, compiled by This is Money, that have a position in Tesla. 

A spokesperson for Baillie Gifford said: ‘The management teams of different strategies work independently of one another with regards to decision making so any reductions won’t be in relation to a house view’.

Tesla weightings in Baillie Gifford funds 
Fund/trust AUM   OCF  31 Dec 2020 weighting
(position in top ten)
31 Jan 2021 weighting
(position in top ten)
Baillie Gifford American fund  £7.9bn  0.51%  8.4 per cent (1)  5.1 per cent (5) 
Baillie Gifford Global Alpha Growth fund  £4.9bn  0.59%  2.6 per cent (4)  No longer in top ten
so weighting undisclosed 
Baillie Gifford Global Discovery fund  £2.6bn  0.76%  6.3 per cent (1)  4.8 per cent (1) 
Baillie Gifford Global Stewardship fund  £626m  0.53%  5.8 per cent (1)  3.7 per cent (2) 
Baillie Gifford International  £1.9bn  0.59%  2.6 per cent (4)  No longer in top ten so weighting undisclosed 
Baillie Gifford Long Term Global Growth investment fund  £4.9bn  0.65%  9.9 per cent (1)  6.8 per cent (1) 
Baillie Gifford Managed fund  £7.6bn  0.42%  1.5 per cent (2)  1 per cent (8) 
Baillie Gifford Positive Change fund  £2.5bn  0.53%  9.7 per cent (1)  9 per cent (1) 
Baillie Gifford US Growth trust  £960m  0.75%  8.7 per cent (1)  4.4 per cent (3) 
Edinburgh Worldwide investment trust  £1.3bn  0.72%  6.5 per cent (1)  6.5 per cent (1) 
Monks investment trust  £3bn  0.48%  1.9 per cent (5)  1.7 per cent (9) 
Scottish Mortgage investment trust £19.4bn  0.36%  8.9 per cent (1) 5.1 per cent (4) 
Source: Baillie Gifford Dec 2020 & Jan 2021 fact sheets. All other figures as at 15 Feb 

Tesla’s runaway pandemic year

In 2020, despite the knock-on effect of the coronavirus pandemic on businesses worldwide, Tesla made half a million new cars.  

Its stock price makes it the most valuable auto maker on the planet, worth more than £580billion, which has made boss Elon Musk the world’s richest man, owning 21 per cent of the stock.

Of course, this means the stock pickers that back him will also have done well and fortune has certainly favoured one of its biggest fans, Baillie Gifford.  

At the end of 2020, the asset manager had £326billion in funds under management and Forbes magazine labelled it ‘the world’s best stock-picking firm’.

Baillie Gifford’s collective profit on holdings of Tesla shares last year alone was a huge £21.2billion and as the car manufacturer’s share price soared over 700 per cent over 2020, the fund manager had to sell some stock.

The rules of various funds, including flagship Scottish Mortgage, require them to limit investors’ exposure to a single stock within the portfolio. 

Priyesh Parmar, of the investment companies research team at Numis Securities, said Baillie Gifford’s approach typically favours running its winners, but he can understand that in this case it requires some managing of the exposure.

He said: ‘Scottish Mortgage has sold 83 per cent of its stake in Tesla over the past 12 months, which would have equated to a third of the portfolio if left untouched. 

‘We understand that this move does not reflect a negative view on the prospects for the company, but instead broadening of the company’s exposure to electric vehicles and the wider energy transition. 

‘We understand that the managers continue to believe that Tesla may have significant upside, but the strong performance means that the probability of outsizes gains has significantly reduced and therefore the managers have taken money off the table.’

Last week, Tesla revealed its $1.5billion (£1.1billion) investment in cryptocurrency Bitcoin and Musk said customers would soon be able to buy its vehicles with it.

In a filing with US authorities, Tesla said it had changed its investment policy to provide it with ‘more flexibility to further diversify and maximise returns on cash that is not required to maintain adequate operating liquidity.’

Buying Bitcoin and promising to accept it in payment form soon is part of that strategy, as is a possible investment in other reserved assets like gold bullion.

Tesla thinks its Bitcoin holdings are ‘highly liquid,’ though it admitted digital currency prices can become very volatile, and could hurt them should they need to be liquidated. 

#fiveDealsWidget .dealItemTitle#mobile {display:none} #fiveDealsWidget {display:block; float:left; clear:both; max-width:636px; margin:0; padding:0; line-height:120%; font-size:12px} #fiveDealsWidget div, #fiveDealsWidget a {margin:0; padding:0; line-height:120%; text-decoration: none; font-family:Arial, Helvetica ,sans-serif} #fiveDealsWidget .widgetTitleBox {display:block; float:left; width:100%; background-color:#af1e1e; } #fiveDealsWidget .widgetTitle {color:#fff; text-transform: uppercase; font-size:18px; font-weight:bold; margin:6px 10px 4px 10px; } #fiveDealsWidget a.dealItem {float:left; display:block; width:124px; margin-right:4px; margin-top:5px; background-color: #e3e3e3; min-height:200px;} #fiveDealsWidget a.dealItem#last {margin-right:0} #fiveDealsWidget .dealItemTitle {display:block; margin:10px 5px; color:#000; font-weight:bold} #fiveDealsWidget .dealItemImage, #fiveDealsWidget .dealItemImage img {float:left; display:block; margin:0; padding:0} #fiveDealsWidget .dealItemImage {border:1px solid #ccc} #fiveDealsWidget .dealItemImage img {width:100%; height:auto} #fiveDealsWidget .dealItemdesc {float:left; display:block; color:#004db3; font-weight:bold; margin:5px;} #fiveDealsWidget .dealItemRate {float:left; display:block; color:#000; margin:5px} #fiveDealsWidget .footerText a:hover{text-decoration: underline;} #fiveDealsWidget .footerSmall{font-size:10px; padding-top:10px;} @media (max-width: 635px) { #fiveDealsWidget a.dealItem {width:19%; margin-right:1%} #fiveDealsWidget a.dealItem#last {width:20%} } @media (max-width: 560px) { #fiveDealsWidget #desktop {display:none;} #fiveDealsWidget #mobile {display:block!important} #fiveDealsWidget a.dealItem {background-color: #fff; height:auto; min-height:auto} #fiveDealsWidget a.dealItem {border-bottom:1px solid #ececec; margin-bottom:5px; padding-bottom:10px} #fiveDealsWidget a.dealItem#last {border-bottom:0px solid #ececec; margin-bottom:5px; padding-bottom:0px} #fiveDealsWidget a.dealItem, #fiveDealsWidget a.dealItem#last {width:100%} #fiveDealsWidget .dealItemContent, #fiveDealsWidget .dealItemImage {float:left; display:inline-block} #fiveDealsWidget .dealItemImage {width:35%; margin-right:1%} #fiveDealsWidget .dealItemContent {width:63%} #fiveDealsWidget .dealItemTitle {margin: 0px 5px 5px; font-size:16px} #fiveDealsWidget .dealItemContent .dealItemdesc, #fiveDealsWidget .dealItemContent .dealItemRate {clear:both} }

This post first appeared on Dailymail.co.uk

Do You Enjoy This Article?
Sign up for our newsletter and receive FREE access to download SuccessDigest Digital Weekly Edition for attainment of your financial freedom in the new digital economy!

Invalid email address
We promise not to spam you. You can unsubscribe at any time.

COMMENTS

WORDPRESS: 0
DISQUS:
%d bloggers like this: