The investment team monitors the Edinburgh Investment Trust portfolio through two lenses: diversification across key thematic and economic themes. Imran Sattar discusses the output of these two factors in this short video clip.
Now we aim to ensure the portfolio is well diversified across themes and the economic pie. We have two lenses with which we look at the portfolio. Here's the first one, a thematic lens. These are the key themes that run through your portfolio and we're aiming to construct a portfolio that is driven by multiple themes rather than just reliant on one or two. It's very much deliberate to have multiple themes driving the portfolio. Let's have a look at some of them. So 'market champions', there on the left-hand side in orange, take Tesco as an example. Its advantaged market leadership position is making the business stronger and stronger. That scale is improving its supplier position, which gives it better pricing, which allows it to win more and more customers. So it's really pressing that competitive edge. Top right, in turquoise, we've talked about GSK and Rentokil. Those are two really good examples of businesses that have internal plans that are driving their profit growth. And then bottom middle, 'data and analytics', about 11% of the portfolio. It still remains key theme in the portfolio, even if we've actively reduced the size of that theme, concentrating our positioning on the ones that we really believe in, the likes of Relx as an example. And Relx is a fabulous business with very powerful data sets that if anything is getting stronger and stronger with analytics and AI overlays. Now as I said, there's a second lens with which we look at the portfolio, and that is how well is the portfolio diversified from an economic pie perspective. For us, this is really important, rather than simply looking at what the portfolio looks like versus the benchmark. And you can see that there's a very broad spread, and that's very much deliberate. Starting from the left, you can see exposure to defensive positions in companies like National Grid and Compass. And as you move right, you can seek exposure to some of the structural growth areas in healthcare and technology. So in healthcare, the likes of AstraZeneca, GSK, and Haleon. In technology, it's the likes of Softcat and Relx. And as you move further right to some of the more cyclical areas of the market, you can see exposure to commodities, that's the Anglo-Americans and Shells of this world. In financials, it is the banks plus Admiral Group. And then as you move further right, industrials, Rotork, Halma, and Weir. Rotork, by the way, received a very nice bid approach at a 7% premium to the undisturbed price, which we are delighted by. And then, finally, consumer Howdens, Dunelm, Greggs. You can see this is a very well-diversified portfolio across a range of sectors, and that's very much deliberate. Right at the beginning, I talked about building a conviction portfolio full of advantage businesses and one that aims to perform across market cycles. By looking at these two lenses, you can see that we have an exciting portfolio that's well set to deliver attractive returns.
KEY RISKS
Past performance does not predict future returns. You may get back less than you originally invested.
We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments
The Edinburgh Investment Trust managed by the Liontrust Global Fundamental team may be exposed to the following risks:
- The Net Asset value (NAV) return of The Company corresponds directly to The performance of The securities in which it invests and The income from them. The share price, which will determine The return to The investor, will also be affected by supply and demand. Consequently, The return to The investor may be higher or lower than The underlying NAV return.
- The use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall.
- The product may invest in smaller companies which may result in a higher level of risk than a product that invests in larger companies. Securities of smaller companies may be subject to abrupt price movements and may be less liquid, which may mean they are not easy to buy or sell.
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Imran Sattar
Imran Sattar heads the Global Fundamental team. He joined Liontrust in April 2022 as part of the acquisition of Majedie Asset Management, where he had managed funds for four years. Before joining Majedie in 2018, Imran was a Managing Director and fund manager at BlackRock, where he managed UK equity funds with combined assets of over £2 billion.
He holds a BSc in Mathematics & Economics from the University of Warwick and is a CFA Charterholder.