Baillie Gifford UK Growth

UK Growth

New for 2019. Offers growth at a discount

Baillie Gifford UK Growth is a new entrant for 2019 and a ‘wildcard’ choice in this category. It has experienced mixed fortunes since its management moved from Schroders to Baillie Gifford last June.

Its discount to net asset value narrowed from 12% to 7% when the new manager was announced. However, an unfavourable backdrop for growth stocks and overhang from the transfer or resale of the trust’s shares held in Schroders’ Isa scheme led to volatility in the discount, making this an opportunistic choice for investors who want to tap into Baillie Gifford’s growth style of investing.

While investor sentiment toward UK equities is likely to be dominated by political developments in the near term, Numis Securities sees scope for the trust to trade at a premium in future now that the shareholder register has been tidied up.

“We believe the high-growth nature of the fund differentiates it from other UK-focused investment companies,” says Charles Cade, head of investment companies research.

Most UK equity trusts have a mandate to deliver income, while the largest two, Woodford Patient Capital and Fidelity Special Values (both also Rated Funds), focus on early stage companies and value stocks respectively.

Iain McCombie and Milena Mileva, co-managers of Baillie Gifford UK Growth, have revamped the portfolio, having sold the vast majority of the fund’s prior portfolio of 49 holdings and replaced them with 42 additions. As a result, 98% of the portfolio was “positioned as desired” at the end of 2018.

Baillie Gifford is waiving its management fee for the current fi nancial year, which more than covers these transition costs. Thereafter, the trust will charge a competitive management fee of 0.5% of net assets and no performance incentive.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Baillie Gifford UK Growth
Manager
Baillie Gifford & Co Limited.
Type
Closed Ended Investment Company
ISIN
GB0007913485
Sector
UK All Companies
Launched
10/03/1994
OCF
0.51 %
Risk Rating
5
3 Year Sharpe
0.42
3 Year Alpha
-1.15
Yield
2.4 %
Benchmark
FTSE AllSh TR GBP
Fund Size
£ 270.18 million
NAV
195
Gearing
98
Discount Premium
-7
To achieve capital growth predominantly from investment in UK equities, with the aim of providing a total return in excess of that on the FTSE All Share Index. The Company invests in a concentrated portfolio of stocks principally selected for their potential to provide attractive absolute returns. The portfolio is invested primarily in UK equities, including convertible securities and equity-related derivatives. The yield on the Company is of secondary importance.
Holding %
Hargreaves Lansdown PLC 4.32 %
Prudential PLC 4.27 %
Auto Trader Group PLC 3.63 %
St James's Place PLC 3.49 %
Renishaw PLC 3.30 %
Diageo PLC 3.24 %
Ultra Electronics Holdings PLC 3.15 %
RELX PLC 3.08 %
Halma PLC 3.07 %
Homeserve PLC 3.04 %
Region %
United Kingdom 97.68 %
Sector %
Financial Services 23.31 %
Consumer Cyclical 19.26 %
Technology 19.22 %
Industrials 18.07 %
Basic materials 6.49 %
Consumer Defensive 5.95 %
Healthcare 5.51 %
Name
Baillie Gifford & Co Limited.
Address
EH1 3AN, Edinburgh, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Iain McCombie
Joined 06/30/2018

Iain, CFA, graduated MA in Accounting from Aberdeen University and trained as a Chartered Accountant. Iain joined Baillie Gifford in 1994, and has spent the majority of his career as an investment manager in our UK Equity Team. He is lead manager of our UK Core strategy and has been one of the four members of our Pan-European Portfolio Construction Group since 2010. He became a Partner in 2005 and Chief of Investment Staff in 2013.

Milena Mileva
Joined 06/30/2018

Milena completed her MPhil in Politics at Oxford University in 2009, having graduated with a BA in Social & Political Science from Cambridge University in 2007. She joined Baillie Gifford 2009 and has spent time working in the Manager’s Developed Asia, Emerging Markets, International and UK equity investment teams.

Data provided by Morningstar.

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