Baillie Gifford UK Growth
Rated Fund 2019-20. Offers growth at a discount from a concentrated portfolio
Baillie Gifford UK Growth was our wildcard in this category in 2019, and we are sticking with it for 2020 on the basis that it needs more time to deliver. It has experienced mixed fortunes since its management moved from Schroders to Baillie Gifford in mid-2018. The fund is now run as a concentrated portfolio, focused on UK companies with large growth opportunities, entrenched competitive positions and ambitious, well-aligned management teams.
It had a difficult period of relative performance in 2019 as its growth style moved out of favour. The portfolio also suffered from not owning some well-known UK blue chips during a period when the market was driven by Brexit and swings in sentiment based on the domestic/international exposure of equities.
Numis Securities believes the high-growth nature of the portfolio differentiates it from other UK-focused investment trusts: most have an equity income mandate, whilst Fidelity Special Values, its largest UK all companies peer and a Rated Fund since 2013, has a value approach focused on catalysts for change.
Iain McCombie and Milena Mileva, co-managers of Baillie Gifford UK Growth, focus on identifying companies with the potential to exploit their competitive advantages to deliver good growth over the next five years and beyond. Their approach targets disruptive companies and avoids many core market sectors, with no holdings in oil and gas exploration, banks or tobacco companies, for example.
The trust waived its fees last year and plans to introduce a competitive 0.5% of net assets charge from 2020, with no performance incentive. Its discount to net asset value narrowed from 12% to 7% when the new manager was announced, and then further to 3%, but has since widened again; investors who are able to time their entry well could therefore pick this trust up as a bargain.
Narrative and ratings content all as of January 2020.See all Money Observer rated funds
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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 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.
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