Fact sheet: Baillie Gifford Corporate Bond

Rated Fund Information
Rated Funds Group
?Money Observer has arranged all its Rated Funds into easy to understand Rated Fund Groups, comprising funds and investment trusts.
STERLING BONDS
Sector
UT Sterling Strategic Bond
Fund type
OEIC
Primary aim
INCOME
Why Money Observer Rates Baillie Gifford Corporate Bond

Rated Fund 2013-2017. A tripartite conviction-led approach

This fund is a past winner of Money Observer's Best Smaller Sterling Bond Fund award. It is attractive to income-seekers because it pays a monthly income and has a reasonable yield of 3.5 per cent. It tends to invest mainly in investment-grade bonds but it also holds high-yield securities.

Its benchmark is a 70/30 split between the two. The managers, Stephen Rodger and Torcail Stewart, point out that past experience shows that the optimal positioning to reduce risk and maximise return is that sort of 70/30 split. However, the ratio can vary.

They describe their investment process as a tripartite approach. They look at three factors - the macroeconomic situation, bond valuations and company-specific risk and return considerations.

They point out that macroeconomic concerns, such as those that have existed over the past couple of years, can throw up attractive valuations when bonds across a whole sector are downgraded even when underlying companies remain sound. Their aim is to exploit these inefficiencies in the market.

Although they therefore tend to be rather contrarian, going against market consensus, they only buy bonds issued by companies they believe are resilient, with stable or improving financial characteristics, that can deliver an attractive return for investors.

They also need to be convinced that there is an identifiable catalyst that will trigger a market revaluation. They only invest in bonds in which they have a strong conviction.

3 Year Performance
Fund Performance15%
Average of Rated Funds Group18.3%
Sector Performance9.4%
Fund information
Fund name
Baillie Gifford Corporate Bond B Inc
Fund manager company
Baillie Gifford & Co Ltd
Fund type
OEIC
Fund managers
  • Lesley Dunnsince 10/01/2018
  • Stephen Rodgersince 31/08/2000
  • Torcail Stewartsince 17/06/2010
Accolades
Winner - Small Fund - Sterling Bond 
Winner - Best Value for Money
Fund objective
The Fund aims to produce a high level of monthly income by investing primarily in a diversified portfolio of investment grade and sub-investment grade fixed interest securities denominated in sterling or denominated in currencies other than sterling and hedged back to sterling. Currency forwards and derivatives may be used from time to time in keeping with the Fund’s objective with the intention of either protecting or enhancing the return on the Fund. No more than 10% in value of the property of the Fund will be invested in units of other collective investment schemes.
Benchmark
  • 70%BAML £ NonGilts 30%BAML European Currencies High Yield Constrained hedgedto£
Investment style
None
Investment method
Fixed Interest
Quick stats
1 Year return
5.6%
1 Year rank in sector
11/81
Sector
UT Sterling Strategic Bond
Yield
3.4%
Ongoing charge (OCF)
?A fund’s ongoing charges figure (OCF) is similar to the old-style total expense ratio. It reflects the annual charge to investors in the fund, in percentage terms, but does not include extra performance-related fees (where these are levied) or the fund’s trading expenses on its underlying investments.
0.52%
Fund size
£723m (£584m last year)
FE Risk score
?FE Risk Scores measure the riskiness of instruments relative to the FTSE 100 index of shares. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. Cash-type investments will have scores close to zero. Funds will tend to have scores in the 0-150 range. The FTSE 100 is always scored at 100. There is no upper limit.
35
Mid price
87.96
Top in this sector
Fund name1 Year
GAM Credit Opportunities GBP11.2%
Man GLG Stgc Bd8%
TwentyFour Dyn Bd7.1%
Old Mutual Bond 17%
Artemis High Income6.6%
...more in UT Sterling Strategic Bond

Performance snapshot

Holdings snapshot

  • No data available.
  • Insurance16.8%
    Telecommunications10.4%
    Media8.7%
    Asset/Mortgage-Backed Securities8.5%
    Banks7.2%
  • No data available.

Fund also available on these pension platforms:

Performance vs Sector

Cumulative performance
 1 mth3 mth6 mth1 yr3 yr5 yr
Fund-1.5%0.1%0.4%5.6%15%33.1%
Sector-1.2%-0.3%-0.5%2.8%9.4%21.7%
Rank within sector64 / 8529 / 8427 / 8211 / 819 / 757 / 67
Quartile4th2nd2nd1st1st1st
Calendar performance
 YTD - 20182017201620152014
Fund-1.2%8.1%10.1%-0.8%10.2%
Sector-1.2%4.9%7.3%-0.3%6.8%
Rank within sector48 / 8510 / 8113 / 7658 / 7319 / 72
Quartile3rd1st1st4th2nd
Risk statistics
Alpha
?Alpha is a measure of a fund's over- or under-performance by comparison to its benchmark. If the Alpha is 5, the fund has outperformed its benchmark by 5%; so the greater the Alpha, the greater the outperformance.
-0.13
Beta
?Beta estimates a fund's volatility by comparison to that of its benchmark. A fund with a beta close to 1 means that the fund will move generally in line with the benchmark. Higher than 1 and the fund is more volatile than the benchmark and vice versa.
1.44
Sharpe
?This commonly-used measure calculates the level of return over and above the return of a notional risk-free investment, such as cash. The difference in returns is then divided by the fund's volatility. The resulting ratio is an indication of the amount of excess return generated per unit of risk.
0.26
Volatility
?Volatility (or standard deviation), when applied to an investment fund, expresses its risk. It shows how widely a range of returns varied from the fund's average return over a particular period. For example, if a fund had an average return of 5%, and its volatility was 15, this would mean that the range of its returns over the period had swung between +20% and -10%.
4.81
Tracking error
?This measures the standard deviation of a fund's excess returns over the returns of an index or benchmark portfolio. As such, it can be an indication of 'riskiness' in the manager's investment style. A Tracking Error below 2 suggests a passive approach. At 3 and above the the manager will be deploying a more active investment style.
2.03
Information ratio
?This is a useful risk-adjusted measure of actively managed fund performance. It is calculated by deducting the returns of the fund's benchmark from the fund's overall returns, then dividing the result by its tracking error. The higher the Information Ratio the better. It is generally considered that a figure of 0.5 reflects a good performance, 0.75 very good, and 1.00 outstanding.
0.65
R-Squared
?An indication of how closely correlated a fund is to an index or a benchmark. Values for R-Squared range between 0 and 1, with 0 indicating no correlation at all and 1 showing a perfect match. Values upwards of 0.7 suggest that the fund's behaviour is increasingly linked to its benchmark.
0.91
Price movement
52 week high89.9
52 week low85.99
Current bid price-
Current offer price-
Current mid price87.96
Region
No data available.
Industry sector
1Insurance16.8%
2Telecommunications10.4%
3Media8.7%
4Asset/Mortgage-Backed Securities8.5%
5Banks7.2%
6Utilities7%
7Others5.5%
8Fixed Interest4.9%
9Money Market4.7%
Asset type
No data available.
Individual holdings
1BERTELSMANN 3.5% UNDATED BDS EUR1000002.7%
2PENSION INSURANCE CORP PLC 6.5% SUBORD NTS 03/07/24 GBP1000002.6%
3BANK OF AMERICA CORP 7% SNR NTS 31/07/28 GBP500002.4%
4FIDELITY 2.5% 20262.3%
5ADMIRAL GROUP PLC 5.5% SUB NTS 25/07/24 GBP1000002.2%
6KFW INTERNATIONAL FINANCE INC 6% NOTES 7/12/2028 GBP(VAR)2.1%
7ORANGE 5.75% 2023 PERP2.1%
8ZIGGO 4.625% 20252.1%
9EIB 5.375% 20211.9%
Management
Fund manager group
Baillie Gifford
Fund manager company
Baillie Gifford & Co Ltd
Fund type
OEIC
Fund objective
The Fund aims to produce a high level of monthly income by investing primarily in a diversified portfolio of investment grade and sub-investment grade fixed interest securities denominated in sterling or denominated in currencies other than sterling and hedged back to sterling. Currency forwards and derivatives may be used from time to time in keeping with the Fund’s objective with the intention of either protecting or enhancing the return on the Fund. No more than 10% in value of the property of the Fund will be invested in units of other collective investment schemes.
Benchmark
  • 70%BAML £ NonGilts 30%BAML European Currencies High Yield Constrained hedgedto£
Investment style
None
Investment method
Fixed Interest
Fund managers
NameSinceBiography
Lesley Dunn10/01/2018Lesley Dunn - graduated from Strathclyde University with a BSc (Hons) in Maths, Statistics & Economics in 2000. She worked for Scottish Widows Investment Partnership for 15 years, initially in the investment grade team before moving to manage the company’s high yield portfolios. Lesley is an Investment Manager in the High Yield Team & is a CFA Charterholder.
Stephen Rodger31/08/2000Stephen graduated BSc (Hons) in Management Science from the University of St Andrews in 1990 and an MSc in Accounting and Finance from the London School of Economics in 1994. He joined Baillie Gifford in 2000 and is Head of Credit and the Head of The Investment Grade Team. Stephen became a Partner in 2008.
Torcail Stewart17/06/2010Torcail graduated BA in Geography from Cambridge University in 2002 and with an M.Phil in Management, Economics and International Relations from the University of St Andrews in 2005. From 2006 to 2008 he worked as an Investment Analyst for the Alliance Trust’s UK Large Cap equity fund. Torcail is a member of the UK Society of Investment Professionals (UKSIP). He joined Baillie Gifford in 2008 and is an Investment Manager in the Credit Team.
Compliance
IA Recognised, UCITS IV Compliant, UCITS V Compliant
Domicile
No data available.
Fund for sale in
United Kingdom
Baillie Gifford Corporate Bond A Acc
Initial charge-
Annual charge1%
Min single investment£1,000
Min regular saving£100
Available in ISANo
Ongoing charge (OCF)1.02%
Total expense ratio (TER)1.02%
Bid price-
Offer price-
Mid price198.8
CurrencyGBX
Price updated19/02/2018
TypeAccumulation
Institutional or retail classRetail
Domicile-
Citi codeBE81
Baillie Gifford Corporate Bond A Inc
Initial charge-
Annual charge1%
Min single investment£1,000
Min regular saving£100
Available in ISANo
Ongoing charge (OCF)1.02%
Total expense ratio (TER)1.02%
Bid price-
Offer price-
Mid price83.22
CurrencyGBX
Price updated19/02/2018
TypeIncome
Institutional or retail classRetail
Domicile-
Citi codeBG12
Baillie Gifford Corporate Bond B Acc
Initial charge-
Annual charge0.5%
Min single investment£1,000
Min regular saving£0
Available in ISANo
Ongoing charge (OCF)0.52%
Total expense ratio (TER)0.52%
Bid price-
Offer price-
Mid price213.2
CurrencyGBX
Price updated19/02/2018
TypeAccumulation
Institutional or retail classRetail
Domicile-
Citi codeBE87
Baillie Gifford Corporate Bond B Inc
Initial charge-
Annual charge0.5%
Min single investment£1,000
Min regular saving£0
Available in ISANo
Ongoing charge (OCF)0.52%
Total expense ratio (TER)0.52%
Bid price-
Offer price-
Mid price87.96
CurrencyGBX
Price updated19/02/2018
TypeIncome
Institutional or retail classRetail
Domicile-
Citi codeBG73
Baillie Gifford Corporate Bond C Acc
Initial charge-
Annual charge-
Min single investment£250,000
Min regular saving£0
Available in ISAYes
Ongoing charge (OCF)0.06%
Total expense ratio (TER)-
Bid price-
Offer price-
Mid price-
CurrencyGBX
Price updated01/01/1900
TypeAccumulation
Institutional or retail classInstitutional
Domicile-
Citi code0ZWP
Data provided by

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