Baillie Gifford UK Growth

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
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
0.18
3 Year Alpha
6.82
Yield
1.6 %
Benchmark
FTSE AllSh TR GBP
Fund Size
£ 285.24 million
NAV
196
Gearing
98
Discount Premium
-8
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 %
Genus PLC 4.31 %
Abcam PLC 4.04 %
Auto Trader Group PLC 3.69 %
Hargreaves Lansdown PLC 3.57 %
Homeserve PLC 3.54 %
RELX PLC 3.43 %
Renishaw PLC 3.41 %
St James's Place PLC 3.38 %
Just Eat Takeaway.com NV 3.37 %
Rightmove PLC 3.28 %
Region %
United Kingdom 94.97 %
Sector %
Financial Services 23.47 %
Industrials 18.77 %
Communication Services 14.94 %
Consumer Cyclical 12.53 %
Healthcare 8.76 %
Technology 8.39 %
Consumer Defensive 5.62 %
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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