Advertorial feature 16 / 17
[ BAILLIE GIFFORD ]
“Instead of trying to predict the path from here, we focus
much more on whether we’re investing in companies that
are flexible, that are resilient, and that can be robust in the
circumstances being thrown at them”
equipment was very difficult to use and
the experience was really poor,” he says
before highlighting the unparalleled
growth in business over recent months
for the video calling company Zoom, a
Scottish Mortgage holding.
“We’ve seen an explosion in demand
for services, but post-lockdown, as
you start to see things moving to
a more normal framework, I think
people who’ve become much more
familiar with the service will start to
say, ‘do I need to travel to this meeting
or could I do it via Zoom?’”
Financial markets typically suffer
from extreme events that create
sporadic spikes in volatility, he
suggests. However, today’s problems
have arrived more suddenly and are
unquestionably deeper than those of
the past.
“We haven’t, as a society, shut down
the economy voluntarily before,”
he points out. “Instead of trying
to predict the path from here, we
focus much more on whether we’re
investing in companies that are
flexible, that are resilient, and that
can be robust in the circumstances
being thrown at them.”
Seeking affirmation that the trust
holds the right companies has kept
Slater busy over recent weeks.
“I think it’s a really interesting
prompt to test your conviction in an
investment case. Have events been
ANNUAL PAST PERFORMANCE TO 31 MARCH EACH YEAR (%)
Source: Morningstar and FTSE, share price, total return. Sterling.
2016 2017 2018 2019 2020
Scottish Mortgage -0.7 40.9 21.6 16.5 12.7
FTSE All World -0.5 33.1 2.9 10.7 -6.2
Past performance is not a guide to future returns.
playing out as you hoped, is the
company doing what you wanted?
You want to make absolutely sure
that your capital is invested in your
highest-conviction ideas,” he says.
“But you also want to be investing
in the companies that you think are
able to contribute positively to society
through these difficult environments.
You want to be investing in the
companies that are going to come out
of this stronger.”
He offers the example of the trust’s
largest holding, Amazon, saying:
“They’ve recruited 100,000 new
employees in the US, they pushed
up wages for their employees during
this period, and that’s enabled them
to service the increased demand
that they’re experiencing. They’re
prioritising away from the full
breadth of selection and focusing on
essential items.
“And those are exactly the things
that as a society we’re wanting them
to do through this period, and they
are exactly the sorts of things that a
company with their balance sheet
strength, their position in the market
ought to be able to deliver, to be
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