Baillie Gifford Strategic Bond Fund B Income
Rated Fund 2013-20. Buys both investment-grade and high-yield bonds
Formerly known as Baillie Gifford Corporate Bond, this fund was renamed in 2018 to reflect its ability to invest across the entire range of fixed income. It's a past winner of Money Observer's Best Smaller Sterling Bond Fund award. The fund is attractive to income-seekers because it pays a good yield of 3.5% monthly.
Managers Torcail Stewart and Lesley Dunn aim to add value almost exclusively through stockpicking; they do not aggressively manage the interest rate exposure or distribution between different credit-quality bonds. They run a portfolio of 60-80 of their best ideas across the investment-grade and high-yield universes.
They look at three factors: the macroeconomic situation, bond valuations and company-specific risk and return considerations. Macroeconomic concerns can throw up attractive valuations when bonds across a whole sector are downgraded even though underlying companies remain sound. The managers' aim is to exploit these inefficiencies in the market. Although they tend to be rather contrarian by going against market consensus, they only buy bonds issued by companies they believe to be resilient and to have stable or improving financial characteristics. They also need to be convinced that an identifiable catalyst will trigger a market revaluation.
FundCalibre, the fund ratings and research provider, rates this as an "elite" fund on the strength of its "philosophically pure strategy that has been successfully implemented by a high-quality investment team".
Narrative and ratings content all as of January 2020.See all Money Observer rated funds
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Lesley 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.
Torcail graduated BA in Geography from the University of Cambridge in 2002 and 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.
Data provided by Morningstar.
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