Baillie Gifford American
1-year return: 19.7% | 3-year return: 70.8%
An argument often levied against active funds investing in US equities is that the market is so efficient that it is difficult to outperform. Baillie Gifford American spectacularly disproves this notion.
It is the standout winner of our Best North America fund award, having been the best performer in its sector over one and three years – a feat it has achieved with remarkably consistent returns. The £1.1 billion fund has outperformed the IA North America sector by 18.1 per cent in the year to the end of March and by 28.5 per cent over the past three years. It has also outperformed the S&P 500 index by 18.7 per cent and 29.6 per cent over one and three years respectively.
Five managers from the North American equities team are named on the fund – Tom Slater, Gary Robinson, Helen Xiong, Andrei Kiselev and Kirsty Gibson. They are bottom-up growth investors with a long investment horizon. They believe they will maximise their chances of delivering outstanding investment performance by identifying the exceptional growth businesses in America and owning them for long enough that the advantages of the business models and cultural strengths become the dominant drivers of the stock prices.
When making an investment, they are therefore not driven by short-term trends, taking a five-year view. Annual portfolio turnover is correspondingly low at 13 per cent. The managers back their judgement, running a concentrated portfolio of 30 to 50 stocks.
HIGHLY COMMENDED FUND
Artemis US Extended Alpha
1-year return: 2.5% | 3-year return: 55.4%
Artemis US Extended Alpha has performed only marginally better than peers and the wider US market over the past year, but remains a leader of the pack over three years and since it launched in 2014. It is highly commended in our awards, as well as making its debut as a Rated Fund in 2018.
This fund could prove a useful tool in investors’ armoury should share prices hit a rockier patch, as has been widely predicted. The US market was the first to recover from the equities bear market that accompanied the financial crisis and could be the first to weaken. The £1.2 billion fund aims to cater for all eventualities because it can profit from both rising and falling share prices.
Manager Stephen Moore combines a traditional portfolio of ‘long’ US stocks (where he expects a company’s share price to rise) with a portfolio of ‘short’ positions (where he anticipates a share price fall). He builds a diversified portfolio of 130 ‘best ideas’ across the long and short portfolios.