An investment fund seven times more profitable than competitors by pouring $ 2 billion into Tesla

According to Bloomberg, a British investment fund has recorded returns seven times higher than competitors this year, thanks to the big bet. The Scottish Mortgage Investment Trust Plc is holding 1.87 million shares of Tesla, with a value that has risen more than $ 2 billion since the end of March when the electric car maker’s share price rose to a record high.

This bet, along with investments in other American tech giants and strong-rising stocks in “home”, helped the Scottish Mortgage record an annual return of 55%, while the company in the same industry is only 7.1%, data from Bloomberg shows.

This closed-end fund’s growth – though it has now grown globally and has no relation to its mortgage fund origins, has helped consolidate their position in the FTSE index. 1000’s. Scottish Mortgage shares were among 5 of the index’s biggest gainers. Currently, Tesla shares account for about 11% of the 12.8 billion pounds ($ 16.9 billion) of the fund’s total asset value, although it cut its holdings earlier this year.

The Scottish Mortgage benefits from being forced to stay indoors due to the pandemic, said Robert Starkey, an investment analyst at research firm Morningstar.

Scottish Mortgage shares soared as they benefited from an investment of more than $ 2 billion in Tesla.

Meanwhile, the fund’s website states that they are aiming for a longer term, with their net worth more than doubling over the past three years. Some of the fund’s 10 shares of the fund have benefited from social isolation, including Amazon, Alibaba, Netflix and food delivery service provider Delivery Hero.

However, it is Tesla that is the leading stock to make a remarkable achievement for this fund. Shares in the electric vehicle maker have more than quadrupled this year, fueled by better business in China than expected and investors increasingly expect the company to be included soon. S&P 500 index.

Scottish Mortgage is one of several funds run by Baillie Gifford & Co. – companies that hold Tesla shares. The move has made the Edinburgh-based investment management firm Tesla’s biggest shareholder, second only to cofounder and CEO Elon Musk, with a total stake across all funds at around six. , 3%.

Scottish Mortgage profits would be even greater if the fund didn’t cut its Tesla holdings in the first quarter, with about 125,000 shares, according to data compiled by Bloomberg. With this move, the fund has “missed” $ 164 million worth of shares, based on the closing price on August 17.

Of the 20 largest stocks (by capitalization) held by the Scottish Mortgage, Tesla was the only company to have its stake cut in the first half of this year, data compiled by Bloomberg show. In the move to make the cuts, regulators made adjustments to reflect their views on the overall balance (OB) of the portfolio, said a fund spokesman. must separate stakes in Tesla. Even so, the fund managers are still very supportive of Tesla.

Consult Bloomberg