The boss of Baillie Gifford’s flagship fund has admitted it was ‘a mistake’ to assume consumer changes during the pandemic would be long lasting.
The stark confession comes after the investment group –renowned for backing global tech stocks – lost more than £11.5billion on stakes in Tesla and Shopify last year after their share prices plummeted.
Speaking at an investor forum in London, Tom Slater, manager of the £13.8billion Scottish Mortgage Investment Trust, said 2022 was ‘humbling’ for the business.
Losses: Baillie Gifford lost more than £11.5bn on stakes in Tesla and Shopify last year after their share prices plummeted
More than £6.5billion of losses on Tesla and £5billion on Shopify made these two of Baillie Gifford’s worst-performing holdings.
Tesla is the Scottish Mortgage trust’s second-largest investment, accounting for 6.8 per cent of the fund.
It also has a smaller stake in Shopify. Tech stocks performed well during the pandemic as people were forced to shop, work and entertain themselves at home.
But growth stocks fortunes have reversed sharply since restrictions have lifted. Rising inflation and interest rates have also hurt their performance.
Talking about Shopify in particular, Slater said: ‘Like a lot of our stocks, Shopify performed strongly in 2020, and then as the pandemic started to taper off, there were questions around how much of that extra demand will stick and how much is consumer behaviour, and what should the valuations of these companies be?’
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