Rated Fund 2013-2017. Be prepared to adopt a patient approach
With assets under management of £4.5 billion, Baillie Gifford's Scottish Mortgage is the largest global generalist investment trust in the UK. It won Money Observer's Best Global Trust award in 2015 and 2016.
It has been managed for the past 17 years by James Anderson, and Tom Slater became his co-manager in 2014. Anderson is fiercely committed to a long-term, high-conviction approach and the trust's portfolio contains only around 70 holdings, with the top 10 accounting for more than 50 per cent by value. Companies are bought on a minimum five-year view.
The managers look for inspirationally managed companies with strong competitive advantages and radical growth opportunities. Anderson has been a long-term believer in the power of technology, which is transforming an ever-wider range of industries - from cars and healthcare to media and retail.
He has also been keen to capitalise on China's emergence as an economic powerhouse. Despite the wider problems recently affecting the Chinese economy, he expects the big three Chinese internet companies (Baidu, Tencent and Alibaba), which are among the trust's top 10 holdings, to continue to grow regardless.
The number of unquoted investments in the portfolio has been growing in recent years and in 2016 shareholders agreed an increase in the proportion of the portfolio's value that can be invested in unquoted holdings from 15 per cent to 25 per cent. The managers see this as an area of the market where they can find real value, although it increases the trust's risk profile.