GLOBALLY
Tom Slater explains how technological advances underpin Scottish
Mortgage’s worldwide investments
T
he Scottish Mortgage Investment Trust
PLC has been investing in innovative
companies around the world since it was
set up in 1909. It began by lending to
plantations in Sri Lanka and Malaysia
before expanding internationally and has retained a
global outlook to this day.
This outward-looking, adventurous spirit,
combined with an understanding of the age’s
dominant themes and forces, has been integral to
the approach taken by its managers. For Tom Slater,
who manages the trust with James Anderson, there
has perhaps never been quite such an exciting time
to be an investor as the opportunities for companies
created by the present technological revolution open
up further interesting possibilities.
Perhaps the most notable manifestation of this is in
internet-related technologies. “Fifteen years ago there
were around 500 million internet users, around a
third of whom were in the US,” Slater says.
“Now there are over three billion globally – a much
bigger market. The technologies that underpinned the
internet revolution over the past 10-15 years are being
applied in a much broader range of industries, and
starting to change more and more established industries.
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It’s exploding out into all aspects of the economy
– advertising, broadcast media, retail, healthcare,
automotive, consumer lending and education.”
Digital connectivity has helped to create new kinds
of businesses while mobile communications provide
constant access to the internet and data feedback, as
well as data analysis.
HOUSEHOLD NAMES
Many of the largest holdings in Scottish Mortgage’s
portfolio have become household names in the last
decade on the back of this – Amazon, Facebook,
Google, Alibaba, Tencent and Baidu, for instance.
Others have used the logistical opportunities created
by the internet more effectively than many of their
competitors to grow their original businesses, such
as Inditex, the parent company of Zara. Yet the
development of opportunities created by the web
is still in its infancy, as bandwidths increase and
people spend more time on the internet through
mobile devices, and as e-commerce moves beyond
shopping portals to providing a range of services from
consumer lending to travel booking.
The vast amounts of data held by companies such
as Google and Facebook may eventually become
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