Baillie Gifford has reduced the size of its stake Tesla, the Elon Musk-led electric vehicle company that was the top belief and biggest driver of ROI over the past year.
The Edinburgh-based asset manager has halved the weighting in both cases Scottish mortgage (SMT), the UK’s largest investment trust, and Baillie Gifford US growth (USA), the Trust with the best performance last year.
The trusts’ positions in Tesla have grown significantly after rising nine times in 2020. After some profit-taking, the US exposure has dropped from 8.7% to 4.4%.
Other Baillie Gifford funds have not yet reported their latest portfolio weights but are likely to have followed suit. Been Tesla’s largest outside investor A year ago, Edinburgh-based Baillie Gifford cut its 7.7% stake to 2.8% at the end of December, making it the fifth largest shareholder in Tesla, including Musk, which owns 18%, according to Refinitiv data. This was a 4.4% decrease from Baillie Gifford’s position in September.
According to the latest Scottish Mortgage factsheet, first reported by Fund Hunter on Twitter, Tesla was up 5.1% at the end of January, making it the fourth-largest position in the global portfolio. This was reduced from 8.9% at the turn of the year when it was still clearly the top position.
At the end of November, fund managers James Anderson and Tom Slater still held a whopping 12.3% of the Californian company’s portfolio.
Since Tesla shares have appreciated more than nine times since early 2020, the duo Baillie Gifford have often faced the question of whether the stock is overvalued and when it will take profits.
While Anderson and Slater have acknowledged that they previously reduced their position for portfolio management and diversification reasons, the extent of the reduction suggests that the first reduction was made last month for investment reasons.
January was a relatively calm month by Tesla standards, with stocks rising 19% in US dollar terms while US markets remained roughly flat.
The move follows a similar cut long-time Scottish mortgage favorite Amazon last year today a 5.9% position.
Last week, Tesla bought $ 1.5 billion worth of Bitcoin with its reserves and announced plans to accept payments in the leading cryptocurrency to hit staggering new highs. Musk (pictured) has been commenting on digital coins a lot on Twitter, which often adds to the volatility of their price movements while also affecting the trading frenzy at Gamestop and other US companies late last month.
In comments too The times, Anderson sounded confident about Tesla’s foray into Bitcoin, even though he expected to raise it with the company.
“It doesn’t surprise us or bother us excessively,” he said. “It’s in the nature of the company, and we’ve made peace with that long ago.” We will no doubt discuss this [the crypto move] in the future and all limits. “
“As part of their now sizable fortune, we are pleased that they are going in that direction,” he added.
At the end of January, SMT weighted the Chinese electric vehicle company at 4.8% Nio was little changed from month to month, suggesting that the decision to cut Tesla is not a slowdown for the entire sector. Chinese internet giant Tencent is now the top position of the FTSE 100 Trust with a position of 6.5%.
The latest portfolio data for £ 7.9bn American Fund, the open sister strategy, has not yet been published. Same goes for £ 4.9bn Long term global growth investment Fund that Slater is also working on and £ 2.3bn Positive change Fund in which Tesla held best.
Scottish mortgage shareholders had a total return of 118% over a year, outperforming the 12% gain for the MSCI AC World Index.
Baillie Gifford cuts Tesla in half for huge profits