>
Scottish mortgage chief admits ‘wrong’ about pandemic spending after funds lose £11.5bn
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 admission comes after the investment group – known for backing global technology stocks – lost more than £11.5bn in stakes in Tesla and Shopify last year after their share prices plummeted.
Tom Slater, manager of the £13.8bn Scottish Mortgage Investment Trust, said at an investor forum in London that 2022 was ‘humiliating’ for the company.
Losses: Baillie Gifford lost more than £11.5 billion in stakes in Tesla and Shopify last year after their share prices plummeted
Over £6.5 billion in losses on Tesla and £5 billion on Shopify made these two of Baillie Gifford’s worst performing positions.
Tesla is the Scottish Mortgage Trust’s second-largest investment, accounting for 6.8 percent of the fund.
It also has a smaller stake in Shopify. Technology stocks performed well during the pandemic as people were forced to shop, work and enjoy themselves from home.
But growth stocks’ fortunes have turned dramatically since restrictions were lifted. Rising inflation and interest rates have also hurt their performance.
Speaking of Shopify in particular, Slater said, “Like many of our stocks, Shopify performed strongly in 2020, and as the pandemic began to ease, there were questions about how much of that additional demand will persist and how much the consumer will stay. behaviour, and what should the valuations of these companies be?’