EDINBURGH Worldwide Investment Trust underperformed on a key measure in the first half but has demonstrated its faith in a strategy that helped it achieve very strong returns last year.

The £1.4 billion trust said its net asset value per share increased by 24.9% in the six months to April 30 while the comparative index increased by 30.3%.

The trust is managed by Edinburgh-based Baillie Gifford, which has enjoyed a strong run after being quick to recognise the potential of technology firms that are transforming sectors of the economy. These include Tesla.

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The comparative index referred to in Edinburgh Worldwide’s interim results is the S&P Global Small Cap Index total return.

In the management report accompanying Edinburgh Worldwide’s interim results, Baillie Gifford noted: “The six months under discussion was preceded by an exceptionally strong year in which the Company’s NAV rose by 57.8%, significantly ahead of the index’s return of 0.4%.

“ We say that not to try and justify a period where we ‘underperformed’ on a relative basis, more that we believe the context is useful in appreciating just how robust the Trust’s returns have been in a period of extreme uncertainty and challenge created by the ongoing Covid-19 pandemic.”

The company noted that fears regarding the prospect of rising inflation have weighed on markets in recent months. There has also been a shake-out following a period during which “froth and fear of missing out behaviour” resulted in some shares being “ill-perceived as a one-way bet”.

Baillie Gifford added: “Short term cycles of exaggerated investor behaviour tend to come and go, but company fundamentals prevail over the longer term.

“The long duration cycles of innovation and technological advancement to which the portfolio is aligned remain very robust and we remain hugely excited about how the portfolio will develop over the coming years and decades.”

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The holdings purchased during the first half broadly reflected three key themes.

Bailie Gifford cited: “Software-based tools that help companies scale in the digital age; the opening of space as an attractive commercial endeavour and products built on deep molecular and physics based insights with potential to transform their respective industries.”

The companies added to the register included JFrog which sells coding management technology that helps software firms develop products faster and more efficiently, and satellite specialist Astranis Space Technologies.

The trust already had a holding in the SpaceX business, which was founded by the chief executive of the Tesla electric vehicle business, Elon Musk.

Baillie Gifford noted the trust further reduced its Tesla holding in the first half following share price strength.