Edinburgh Worldwide Investment Trust suffered another bruising period in the six months to 30 April as market sentiment towards its small-cap growth philosophy continued to sour.
The Baillie Gifford trust’s share price fell 13.6%, to 149.2p, becoming more dislocated from net asset value (NAV) as the half progressed. NAV per share dropped 7.5%, to 182.8p, underperforming the trust’s S&P Global Smaller Companies Index benchmark by six percentage points.
Despite buying back almost 2.9 million shares, the trust grappled with a widening discount throughout the period, which grew from 12.7% in October to 18.4% at the end of April. As of 6 June, the discount sat at 18.6%.
The interim management report likened the current market conditions to those of last year, in which companies and stock markets had been forced to navigate “inflationary and geopolitical challenges”.
The report added: “This is sculpting a new investment environment, one where capital is less freely available, the hurdle rate for returns is higher, and the tolerance of uncertainty is markedly lower.”
As a result, investors are shortening time horizons and placing more importance on “near-term resiliency”, the report said, all to the detriment of the trust.
However, the trust’s share price has lagged NAV over a longer period of time; the five years to 30 April saw NAV per share grow by more than 21% while share price fell by nearly 5%. During the same period, the comparative index increased by 33.8%.
Across the six months, the trust made a loss of £58m after tax, though this marked an improvement on 2022; in its previous financial year the trust mada loss of £542m.
It suffered a 40.3% decline in NAV per share that year, with the benchmark down just 6.8% over the same period. Share price also plummeted 46%.