Mid Wynd new manager Edelsten culls sovereign debt exposure

Following the takeover of the Mid Wynd International investment trust, new managers Simon Edelsten, Alex Illingworth and Rosanna Burcheri have removed all exposure to sovereign debt in the closed-ended fund while boosting exposure to frontier equity markets.

Artemis took over management of the investment trust from Baillie Gifford in May this year following retirement of the Baillie Gifford manager Michael MacPhee.

The trust previously had approximately 3.6 per cent invested in fixed income before Artemis took over the trust, according to the final intermin report from Baillie Gifford at the end of 2013.

However in the trust’s annual report for 2014 the new managers, Edelsten, Illingworth and Burcheri, have opted to move out of sovereign debt consequently reducing the weighting to fixed income to just 0.5 per cent.

Its says: “The portfolio no longer has any exposure to sovereign debt and is now almost fully comprised of equities.”

Within the investment company’s weighting to equities the new managers have also brought down exposure to the UK at the same time as adding a number of stocks in frontier markets as well as Japan and China equities.

“There was a reduction in the Company’s weighting to the UK, principally through a reduced level of exposure to IP Group and the companies spun out from it,” they say.

“We have increased the number of holdings in frontier markets, adding investments exposed to the long-term growth potential of emerging economies such as Myanmar and Laos.”

As a fund house Baillie Gifford is known for its preference for the technology sector but Edelsten and his team have reduced exposure in this area too, following concerns that some stocks did not yet have a profitable business model.

“We reduced the portfolio’s exposure to companies that had yet to show a profitable business model, especially in biotechnology and internet services.” they add.