Baillie Gifford Strategic Bond Fund B Income

Sterling Bonds

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
Name
Baillie Gifford Strategic Bond Fund B Income
Manager
Baillie Gifford & Co Limited.
Type
Open Ended Investment Company
ISIN
GB0005947741
Sector
£ Strategic Bond
Launched
26/02/1999
OCF
0.52 %
Risk Rating
3
3 Year Sharpe
0.13
3 Year Alpha
-2.80
Yield
3.7 %
Benchmark
IA Sterling Strategic Bond Sector GBP
Baillie Gifford Strategic Bond Fund aims to produce monthly income. Opportunities for capital growth are also sought, subject to prevailing market conditions.The Fund will invest at least 80% in a diversified portfolio of (1) investment grade and (2) sub-investment grade bonds, issued by corporate issuers, public bodies and supranationals, and (3) developed market government bonds.
Holding %
Long Gilt Future Mar 20 9.37 %
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Future on Euro Bobl Future Dec 19 2.74 %
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Netflix, Inc. 4.62% 2.05 %
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NGG Finance plc 5.62% 1.96 %
Bank of America Corporation 7% 1.92 %
Brown-Forman Corporation 2.6% 1.84 %
Virgin Media Sec Finance PLC 5% 1.84 %
Name
Baillie Gifford & Co Limited.
Address
EH1 3AN, Edinburgh, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Lesley Dunn
Joined 01/10/2018

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 Stewart
Joined 06/01/2010

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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