Imran Sattar, Portfolio Manager of Edinburgh Investment Trust

We like to diversify the Edinburgh Investment Trust within the 40 to 50 holdings in the portfolio by both companies and economic exposure. The portfolio currently is well diversified across stocks and sectors with a range of different economic characteristics.

The most significant positions in the portfolio (which we define as holdings whose weightings are most different from that of the index) are the retailers Dunelm, Marks & Spencer and Tesco, the energy company Centrica, and the banking group NatWest. The Trust has below average (versus the index weight) holdings in the pharmaceutical company AstraZeneca, Diageo, RELX, HSBC and the mining company Rio Tinto.

As at 31 March 2024, we held 5.6% of the portfolio in non-UK stocks. We use this element of the portfolio to gain access to businesses with the kind of characteristics or features that we seek but which are not  available on the UK stockmarket. The principal non-UK holding was Verisk Analytics, a world-leading data technology business. Other overseas holdings include the pharmaceutical company Novartis, the semiconductor company Intel and Newmont Mining.

Rotork, a recent purchase, is an excellent example of the features we find appealing in a company. Rotork is a market leading industrials company in flow control and instrumentation products. It is exposed to attractive long-term growth drivers such as oil and gas upstream electrification and industrial process automation. Rotork is the market leader in pneumatic actuators and has a strong long-term track record of product quality and reliability.

Where it has had more challenges historically has been with organic growth, which the new chief executive is addressing through a strategy to focus the business on higher growth business lines, reinforcing and improving the customer value proposition, and improving innovation. If successful, this shift in the business should lead to mid to high single digit sales growth and gentle margin accretion over the medium term.


From a macroeconomic perspective, we are mindful of changing expectations for the path of interest rate normalisation, as inflation remains more entrenched than expected. This period of heightened monetary policy uncertainty coincides with a period of elevated geopolitical risks, making a flexible and pragmatic approach to managing a portfolio important.

Looking forward, we expect risks to remain high, with 2024 seeing a significant number of elections globally in countries accounting for over 50% of global GDP and over 50% of the global population. China continues to face growth headwinds as the economy seeks to transition from an investment led to a more balanced model with consumption led growth. With consumer confidence in China intimately tied to the property market, this transition is unlikely to be smooth.

With the elevated uncertainty across a range of factors, our focus remains on owning businesses where growth is helped by exposure to structural growth tailwinds, or where there is a change in industry structure or company strategy which will enable future profit growth. Our confidence in Edinburgh Investment Trust’s portfolio comes from owning strong businesses managed by intelligent management teams executing on their business plans to drive total shareholder returns.

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Issue Date: 12 Jun 2024