And the winner of the Global Emerging Markets award is...
1-year return: 17.1%
3-year return: 73.0%
Sector-leading performance sees Baillie Gifford Emerging Markets Growth make its debut in both our Rated Funds and awards for 2019. It has grown investors’ capital handsomely over both short and longer timeframes.
Baillie Gifford is a long-term growth-oriented investment house and this fund is no exception. Managers Richard Sneller and Mike Gush invest on a five-year view and look for significant upside in each stock that they invest in. Their process is driven by rigorous, fundamental, bottom-up analysis undertaken by Baillie Gifford’s emerging markets equity team, which Sneller heads. He believes the next decade will prove the “most exciting growth stage” in emerging markets.
Drawing on the team’s analysis, as well as insights gleaned from discussions with Baillie Gifford’s global investors, the managers produce a portfolio that typically holds 60 to 100 stocks. The top 10 holdings account for almost half of its £945 million assets.
China is the largest country weighting at almost one third, followed by Brazil, India and South Korea, all of which account for a double-digit percentage of assets. Smaller proportions are allocated to Russia, Taiwan, Mexico, Thailand and Indonesia.
In keeping with other Baillie Gifford funds, technology is at the forefront of the portfolio. Tencent, Alibaba, TSMC and Samsung Electronics are all in the top five. The managers say these companies are in the midst of transforming lives, businesses and societies and remain compelling investments. Sneller and Gush have also recently returned to some “old favourites” in the energy sector, such as CNOOC in China and Petrobras in Brazil. They stand to benefit from “relentless” global economic growth.
HIGHLY COMMENDED FUND
BlackRock Emerging Markets is highly commended in this category despite its short manager tenure. The fund has outperformed its sector since new managers took over in March 2017.
Andrew Swan, formerly head of Asian equities, became head of Asian and global emerging markets equities, responsible for the wider core global emerging markets platform.
Gordon Fraser, a portfolio manager in the global emerging market equity team, relocated to Hong Kong from London to assume portfolio management responsibilities alongside Swan.
The fund is overweight China and Brazil. The pair made a call to load up on Brazilian companies just before an election-spurred rally late last year and are betting on companies tied to China advancing on prospects of an improvement in the economy and others gaining from a weak US dollar.
Tech companies make Baillie Gifford fund the pack leader