The new managers of a £730 million Scottish investment trust have predicted ‘corporate Darwinism on steroids’ as they revealed the companies they believe can ride out the Covid-19 storm.
Majedie Asset Management was recently appointed to run the 130-year-old UK-focused Edinburgh Investment Trust in December after more than three years of market underperformance.
New portfolio managers James de Uphaugh and Chris Field have been reshaping the portfolio since taking over in March and today revealed the list of companies they have backed including RBS, Lloyds, Weir and Diageo.
In the update the trust said that the virus has imposed “a hard stop on chunks of the UK and the developed world economies and we are in a period of extreme uncertainty that exposes weak links and interconnectedness”.
“Against this backdrop we have constructed a diversified portfolio of shares, with a focus on companies with strong market positions. Many of the larger positions are holdings that we judge to be leaders in their fields. Examples include Tesco, Smith & Nephew, Hays and Marshalls: they and other holdings should emerge from this crisis in even stronger shape.
“Despite the massive monetary and fiscal stimulus, weaker companies are likely to close or be taken over at depressed prices. In short, the competitive landscape will tighten yet further: this will be corporate Darwinism on steroids. Our focus on strong and sustainable business models will be even more important than before the crisis.”
