Objective
Edinburgh Worldwide’s objective is the achievement of growth from a highly concentrated global portfolio. It tends to hold shares in around just forty companies with no geographical constraints and income is not a consideration. Due to its concentration it is potentially more volatile than the other trusts.
Investment Policy
While the policy is global investment, the approach adopted is to construct a portfolio through the identification of individual companies which offer long term growth potential, typically over at least a five year horizon. The portfolio is actively managed and does not seek to track the comparative index hence a degree of volatility against the index is inevitable.
In constructing the equity portfolio a spread of risk is achieved by diversifying the portfolio through investment in:
- 25 to 50 holdings
- a minimum of six countries
- a minimum of six sectors
On acquisition, no holding shall exceed 5% of total assets and no more than 15% of the Company’s gross assets will be invested in other listed investment companies.
From time to time, fixed interest holdings, or non equity or unlisted equity investments, may be held on an opportunistic basis. On acquisition of any unlisted equity investment, the Company’s aggregate holdings in unlisted equity investments shall not exceed 1% of total assets.
Derivative instruments are not normally used but, in certain circumstances and with the prior approval of the Board, their use may be considered either as a hedge or to exploit an investment opportunity.
The Company recognises the long term advantages of gearing and would seek to have a maximum equity gearing level of 30% of shareholders’ funds in the absence of exceptional market conditions.
Borrowings are invested in equity markets when it is considered that investment grounds merit the Company taking a geared position to equities. Gearing levels, and the extent of equity gearing, are discussed by the Board and Managers at every Board meeting.
