SSON & EWI

Sally57 · 14 January at 12:20PM

I invested in both Smithson (SSON) and Edinburgh Worldwide (EWI) a couple of years ago as long term holds. SSON has done really well, however, EWI has been extremely volatile and I’m well down on this investment.

Does anybody else hold EWI (or Baillie Gifford Global Discovery) and if so why is it currently underperforming to such a great extent? Any views/opinions appreciated.

coastline · 14 January at 1:07PM

Higher interest rates influencing growth prospects especially in the tech sector. Both SSON and EWI contain a fair percentage of technology.

United States Government Bond 10Y | 2022 Data | 2023 Forecast | 1912-2021 Historical (tradingeconomics.com)

There's also been a shift from growth to value..

IVW | SharpChart | StockCharts.com

IVE | SharpChart | StockCharts.com

SMT and ATT have taken a hit.

Scottish Mortgage Investment Trust PLC, UK:SMT Advanced Chart - (LON) UK:SMT, Scottish Mortgage Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

Decent read..

Why Isn’t the Stock Market Down More Right Now? (awealthofcommonsense.com)

Prism · 14 January at 1:32PM

EWI doubled over the course of 2020 so you may have invested after the big rise rather than before it. As is pretty normal, some of those gains have now reversed.

NoviceInvestor1 · 14 January at 3:38PM

EWI is full of overpriced meme stocks, many of which have had corrections (some have fallen over 50%). It's not one I'd want to hold, personally.

daveharruk · 14 January at 10:15PM

coastline said:

Higher interest rates influencing growth prospects especially in the tech sector. Both SSON and EWI contain a fair percentage of technology.

United States Government Bond 10Y | 2022 Data | 2023 Forecast | 1912-2021 Historical (tradingeconomics.com)

There's also been a shift from growth to value..

IVW | SharpChart | StockCharts.com

IVE | SharpChart | StockCharts.com

SMT and ATT have taken a hit.

Scottish Mortgage Investment Trust PLC, UK:SMT Advanced Chart - (LON) UK:SMT, Scottish Mortgage Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

Decent read..

Why Isn’t the Stock Market Down More Right Now? (awealthofcommonsense.com)

There was a short-lived rotation from growth last year too. Then things just carried on as normal afterwards. There is no reason to think it will be any different this time.

There is a big difference between highly indebted companies and others like Google, Microsoft and Apple who are essentially debt free and sitting on huge piles of case - the effect of rising interest rates on these companies is negligible. They are also safer companies to hold through a period of higher inflation too, as many of the costs they incur are reducing and they can more easily command higher prices. On the other hand, the market is basically a measure of sentiment, so if that is lacking at the moment, then that will clearly affect prices in the short-term until confidence returns. So, to summarise, it is very unsafe to lump all "technology" (does any growing business *not* use technology these days) companies together.

As for SSON and EWI, both have excellent track records and are highly rated by Morningstar (silver analyst or better as I recall), so I don't think there is any need for concern as long-term they will both likely perform well. Currently EWI seems to be suffering a temporary loss of confidence as it's fallen to a substantial and unusually high discount to NAV. If you have some spare cash to invest, I would suggest monitoring this as it looks like there could be a good buying opportunity coming up soon (it is definitely something that I will be doing...). I hold 4% SSON and 1% EWI - so they are not core holdings but they both add something unique to my portfolio. My target is 5% SSON and 2% EWI.

Thrugelmir · 14 January at 10:58PM

Underperforming which benchmark? Short term performance is meaningless. 3-5 years is more appropriate for active funds.

Audaxer · 15 January at 12:05AM

I see that EWI is down nearly 35% over the last year to date, so for some I think it could be a good time to buy, but it looks too volatile for me.

csgohan4 · 15 January at 1:10PM

BG Glob discov was something I used to hold, but got out just before TSLA and tech in general took a dip. The fund had too much exposure to this imo.

SSON would be something to fill my Small caps gap once I am done with penny investing

MPN · 15 January at 6:59PM

I invested 5% of my portfolio in EWI in Springtime 2020 at a low price of around 180 and at quite a good discount for this trust. I sold out at around 405 to take the profits. I actually bought back in yesterday at 235 because I have faith in Douglas Brodie and his team and I feel quite confident that eventually their growth stock picks will do well again. Give it time…

Sally57 · 15 January at 10:35PM

MPN you did very well but I invested in EWI at a much higher price than you so at the moment I have quite a big ‘paper loss’. However, I intend to stay invested so hopefully the share price will improve given time.

ANGLICANPAT · 16 January at 12:59PM

Re funds tech heavy , isnt this just a blip ? Surely longer term the world is going to get more and more 'techie' ? Why wouldnt it? With more old people needing looking after, and less workers wanting menial low paid jobs for instance, and folk wanting more and more sophisticated leisure options, wont tech investment in AI /robotics grow fast ? And once we're over Covid and supply problems, wont all kinds of technology continue to grow to meet climate change and other environmental /agricultural challenges ?

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SSON & EWI

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