Explore Baillie Gifford Funds and their performance, comparing them with other alternatives.
These funds are widely sold not only in the expat market, but locally as well.
Are these funds a good bet for your money? We will investigate the pros and cons of the funds in today’s article.
If you want me to invest or are looking for a second opinion on the funds, don’t hesitate to contact me, email ([email protected]) or use the WhatsApp function below.
Before we give out an expert verdict on Ballie Gifford (Funds), let us take a look at the company and the funds in brief.
Baillie Gifford – Baillie Gifford is a company that specializes in investment management and is completely owned by the partners working within the company.
Founded in the year 1908, Baillie Gifford happened to be a partnership between two people namely ‘Colonel Augustus Baillie’ and ‘Carlyle Gifford’. Currently, the headquarters of this 113-year-old company is located in Edinburgh, Scotland, UK.
It was not a company involved in investment from the very beginning. First, it was a law firm in 1907 and became a company involved with investment business in 1908.
As of September 30, 2020, Baillie Gifford is responsible for the management and advice of a whopping amount of $370.4 billion. This $370.4 billion is distributed among specialist equity, fixed income, multi-asset portfolios, and balanced portfolios.
Holdings of Baillie Gifford:
- Tesla
- Amazon
- Illumina
- Tencent
- NIO
- ASML
- Meituan Dianping
- Alibaba
- Delivery Hero
- Kering
- Denali Therapeutics
- Netflix
- MercardoLibre
- Pinduoduo
- Ferrari
- Zalando
- NVIDIA
- Ant International
- Hello Fresh
- Moderna
- Adyen
- ByteDance
- Tempus Labs Inc
- Zoom Video Communications
- Shopify
- Ginkgo BioWorks
- Wayfair
- Kinnevik
- You & Mr. Jones
- Zipline
- Workday
- Intuitive Surgical
- Stripe
- Space Exploration Technologies
- Atlas Copco
- TransferWise
Funds at Baillie Gifford – The fund range of Ballie Gifford consists of a wide range of Investment Trusts and OEICs, let us have a brief look at the list of those funds.
- Scottish Mortgage Investment Trust PLC
- The Scottish American Investment Company P.L.C.
- The Monks Investment Trust PLC
- American Fund
- Strategic Bond Fund
- Baillie Gifford European Growth Trust plc
- High Yield Bond Fund
- Baillie Gifford China Growth Trust
- Global Discovery Fund
- Japanese Fund
- Managed Fund
- Pacific Fund
- Multi-Asset Growth Fund
- Baillie Gifford Shin Nippon PLC
- Baillie Gifford UK Growth Fund plc
- Baillie Gifford US Growth Trust plc
- British Smaller Companies Fund
- China Fund
- Developed Asia Pacific Fund
- Edinburgh Worldwide Investment Trust plc
- Emerging Markets Bond Fund
- Emerging Markets Growth Fund
- Emerging Markets Leading Companies Fund
- European Fund
- Global Alpha Growth Fund
- Global Income Growth Fund
- Global Stewardship Fund
- Health Innovation Fund
- International Fund
- Investment Grade Bond Fund
- Investment Grade Long Bond Fund
- Japanese Income Growth Fund
- Japanese Smaller Companies Fund
- Long term Global Growth Investment Fund
- Multi-Asset Income Fund
- Pacific Horizon Investment Trust PLC
- Positive Change Fund
- Responsible Global Equity Income Fund
- Sterling Aggregate Bond Fund
- The Baillie Gifford Japan Trust PLC
- UK Equity Alpha Fund
- UK Equity Core Fund
- UK Equity Focus Fund
Analysis:
With the help of its best-in-class financial advisers and investors, Ballie Gifford was able to become one of the best fund management companies while gaining a very good reputation.
Their excellent strategies and growth-seeking approach, known as ‘Actual Investing’, has been proven to provide excellent returns on the £300 billion worth assets under their management.
This made them get a good reputation in the UK as well as outside of the UK. The investment trusts and funds of Baillie Gifford are highly recommended by financial advisers to be among the best investment opportunities available in the market.
However, a question still exists on whether or not they are actually the best as most people boast. Therefore, we will have a detailed overview of this topic and cover as much information as possible.
Based on this analysis, we were able to confirm that many of their funds had a continuous history of top performance.
However, to provide a better understanding to the people, some of the analysis given below focuses on Baillie Gifford’s funds’ performance by the time the markets were not so stable, i.e., July 2020.
We made an analysis of that period because the year was half complete and the spread of COVID-19 was in the peak situation impacting the global markets all over the world.
Baillie Gifford Active Fund Management – Ballie Gifford was a company, which is an early investor in many of the world’s most profitable private and public tech companies.
These top-tier tech companies were all-time best and included the giants such as Amazon, Google, Tesla, etc.
Baillie Gifford is known for investing in different geographies, where the first and very successful investment is the early investment entry into the Chinese Corporate Giant Alibaba.
Baillie Gifford is known for actively creating and managing the topmost funds diversified across various regions. Not only that, but Baillie Gifford is known to be the best fund manager in the world.
Based on the comparison of various fund management companies in the world, Ballie Gifford ranked the first place as stated in many reviews, while having the highest amount of funds under management.
Baillie Gifford Asset Management – Baillie Gifford is the best large-scale investment firm and an independent private partnership in the UK.
In most cases, large-scale investment companies boost their performance and growth by mergers and acquisitions with some other companies. But, Ballie Gifford remained to be a large-scale investment management company since their launch that took place more than 110 years ago.
As it is a company that is private and entirely owned by their respective working partners, Baillie Gifford was successful in meeting the requirements of external shareholders and enabled them to maintain a structure highly concentrated on the quality of the products they offer.
The performance of many of the funds of Baillie Gifford was consistently high when compared to most of their competitors’ performance in the same sectors.
This is one of the major reasons that many investors and advisers suggest Baillie Gifford as one of the best fund management companies in the industry.
Fund Performance Summary – More than half of Baillie Gifford’s funds happened to continuously outperform the funds of the rival companies for a long time. By the third quarter of 2020, Baillie Gifford was able to manage 6 funds, which ranked 1st place in their respective sectors.
To be precise, these 6 funds had a higher performance when compared to the remaining 310 funds within each of their respective sectors.
From all other funds, Baillie Gifford American fund has attained the highest growth returns among all other funds of Baillie Gifford. This fund of Baillie Gifford is categorized within the IA North America sector along with 117 other rival funds.
Over the last 1,3, and 5 years the Baillie Gifford American fund was able to rank in the first position in the sector with a growth percentage of 47.60% for 1 year, 125.82% for 3 years, and 248.25% for 5 years by the end of the second quarter of 2020.
However, not all the funds of Baillie Gifford are among the top-performing funds. For example, the least performing fund of Baillie Gifford is the Baillie Gifford British Smaller Companies fund.
We say that this fund is the least performing fund of Baillie Gifford because it was ranked 37 out of 46 funds within the respective sector. Adding to that, it was only able to acquire returns of 7.01% over a period of 5 years.
Based on the stats obtained from the fund manager league table of a company called Yodelar, Baillie Gifford was the best performing fund of 2020.
According to the stats of this league table, among 81 fund management companies and 2,123 funds, Baillie Gifford was able to stay in the number one position by having the most funds that had 4-star and 5-star performances.
Detailed Information on Investment Trusts and Funds:
Baillie Gifford Investment Trusts:
Out of the 44 funds, which are managed by Baillie Gifford, 11 are within their investment trust range. Among these investment trusts, Scottish Mortgage Investment Trust is the UK’s largest investment trust.
Just like the unit trust funds of Baillie Gifford, investment trusts also happen to have a consistent record of performing better than others within the same sectors.
Scottish Mortgage Investment Trust PLC – One of the major investment trusts of Baillie Gifford is the Scottish Mortgage Investment Trust, which was launched in 1909. Despite the name, this global fund is not at all involved with mortgages.
Even though this fund consists of around 50 companies, Tesla and Amazon are more than 20% of the total. This trust is the most competitive trust and had the top performance in the past 1 & 3 years.
Monks Investment Trust – Another major investment trust of Baillie Gifford is the Monks Investment Trust that highly concentrates on long-term growth.
Over the past 1,3 & 5 years, Monks investment trust has been among the top performers in its respective sector with a good amount of growth.
Baillie Gifford Edinburgh Worldwide – This investment trust also concentrates on long-term capital growth with a portfolio of average entrepreneurial companies that has a market capitalization of less than $5 billion as an initial investment.
Over the last 10 years, this specific investment trust has returned an amazing growth of 448.72%.
Baillie Gifford US Growth Trust – The top holdings of the US Growth Trust are the world’s most successful and biggest companies, which are known to be having a big share of their market and can’t easily be replicated.
Baillie Gifford Funds:
Of all the funds of Baillie Gifford, more than 50% have obtained a 4-star or 5-star rating. Let us have a look at some of those in brief.
Baillie Gifford American Fund – Over the past 5 years, the primary objective of the Baillie Gifford American Fund was to deliver top-notch performance.
Just like the Baillie Gifford US Growth Trust, American Fund also consists of holdings in some of the major and fast-growing companies in the world. This aspect has been helpful for this fund to become one of the best growth funds in the market.
In the North American sector, the Baillie Gifford American Fund has been the best performer with returns of 47.60% (1 year), 125.82% (3 years), and 248.25% (5 years) by July 2020.
The most important thing to take into consideration is that the sector in which this fund exists had an average of 6.53% (1 year), 34.04% (3 years), and 80.28% (5 years) during that period.
However, in the list of top ten performing funds of the year 2020, Baillie Gifford American Fund was in first place with 121.8%.
Concentrating on the global sector, the sector average performance in which this fund exists was 16.1%.
There is no surprise that this fund came out at the top because the portfolio consisted of holdings from the best companies such as Tesla, Shopify, Zoom, Wayfair, Amazon, etc.
Baillie Gifford Japanese Smaller Companies – This fund exists within the IA Japanese Small Companies sector, which is known for having a higher amount of risk and periods of high volatility.
Because of being in a high-risk sector, the Baillie Gifford Japanese Smaller Companies fund has the probability of having sizeable profits.
Baillie Gifford Global Discovery – Another fund of Baillie Gifford that has an exceptional performance and growth rate is the Baillie Gifford Global Discovery fund.
This company also concentrates on the innovative companies that are still growing and have extreme chances of long-term growth.
Struggles – Regardless of the fact that most of the funds offered by Baillie Gifford have an excellent performance in comparison with most of the fund management companies, there are still certain instances where Baillie Gifford had to struggle a lot to deliver better performance.
For example, let us take a look at another fund of them that is among their least performing companies, which is Baillie Gifford Emerging Markets Bond Fund.
Over the past 5 years (before July 2020), the return of this fund was just 24.40%, while the sector average stood at 25.62%. On the bright side, the returns of this fund over the past 1 year were 4.89%, which was higher than the sector average of 3.77%.
Another fund that had one of the lowest performances was the Baillie Gifford British Smaller Companies fund, which we have already discussed.
Baillie Gifford Review:
Baillie Gifford is now one of the best preferred choices of portfolios as it has been one of the best investment management companies that is known to provide great returns on investments.
Most of the funds are very popular and the year 2020 is known for the boosted performance of Baillie Gifford.
Most funds of Baillie Gifford have been continuously ranked as the best in their respective sector over the past 1 year, 3 years, and 5 years.
By the end of July 2020, Ballie Gifford North American returned growth has been estimated to be more than 248% over the past 5 years. This is actually the largest returned growth among all of the 118 funds in the Invest Association North America sector.
Not only that but by that same time, 29 funds out of the 44 funds and investment trusts that are managed by Baillie Gifford had an excellent performance. This performance was estimated to be 75% higher than that of the competitors in the same sector.
Funds that are managed by Baillie Gifford had the highest performance in the list of the top 10 performing portfolios in 2020 based on the data provided by FE Analytics.
Four of Baillie Gifford’s funds have been listed in the top ten performing funds, which include the Baillie Gifford American Fund.
The Baillie Gifford American Fund has been stated as the best performing portfolio of 2020 by having a return of 122%. After that, Morgan Stanley’s Growth fund was in second place with a 110% return.
After the top three best performing portfolios, Baillie Gifford was again in the third position with its Long Term Global Growth having a 95.6% return.
Following it, the fourth was Baillie Gifford’s Positive Change fund with 80.1% and Baillie Gifford’s Global Discovery fund was in the 7th position while having a return of 76.8%.
Baillie Gifford had around £197 billion worth of assets under management, which was increased to £300 by the end of 2020.
The high-profile funds of Baillie Gifford are the major shareholders of the best international companies such as Tesla, Amazon, Netflix, Tencent, Alibaba, etc.
Is it risky?
Because of the excellent returns made by this asset manager, any person who is an investor would definitely want to have a piece of Baillie Gifford’s funds and investment trusts.
By the end of the year 2020 (9th December to be precise), the funds and investment trusts managed by Baillie Gifford had a total return of around 50 percent.
After being successful for two consistent years, it is necessary to have some caution. No doubt that Baillie Gifford entered into the domain of the best performing portfolios.
Even though Baillie Gifford’s Scottish Mortgage Investment Trust (SMT) is its major global equity portfolio, Baillie Gifford has some of the best funds and investment trusts in the USA, Asia, Europe, and corporate bond universe.
Adding to that, the company is gradually expanding its global outreach. Keystone (KIT) board, which is a value-oriented UK equity trust, recently stated that it will appoint Baillie Gifford to run their assets.
They want Baillie Gifford to run their assets similar to Baillie Gifford’s Positive Change global equity. Baillie Gifford also acquired Witan Pacific in early 2019, which is now Baillie Gifford European Growth (BGEU).
However, there is a possibility that the best performance streak might not be continuous. If the growth trends are still consistent, the portfolio of Baillie Gifford might still be performing well.
Because of the skeptical approach of Baillie Gifford, it was able to perform well in the November of 2020. Anyhow, Baillie Gifford concentrates mainly on long term development.
There is a need to consider two aspects, which are the overlap between the popular growth trends and the risk of investors getting doubled.
For example, let us see the Scottish Mortgage of Baillie Gifford. This investment trust holds 10.8 percent in Tesla (US:TSLA), which is quite an amazing thing.
However, this is also a holding in other funds of Baillie Gifford funds. For example, Positive Change has 8.6% invested in Tesla by the end of October, Baillie Gifford American has 7.9% invested in Tesla, and even the Monks Investment Trust is invested in Tesla.
Another example is Amazon, which is in the Scottish Mortgage Investment Trust as well as the US fund. The same is the case for the companies such as Wayfair, Meituan Dianping, etc.
By looking at this, we can see the actual chances for overlap to happen and the difference between the funds of Baillie Gifford. The portfolio of Scottish Mortgage Investment Trust concentrates on growth. On the other hand, Monks Investment Trust focuses on different themes, which are least high-performing than others.
Finally, what we have to say is that investing in most of the stock market’s current top-performing companies through Baillie Gifford or in any other way is an excellent strategy.
However, one should not forget the risks involved with their favorite funds before making an investment.
Bottom Line:
Because most funds of Baillie Gifford have holdings in some of the best companies such as Tesla, Amazon, Zoom, Tencent, and many others, there is no doubt that Baillie Gifford will still be able to be one of the best fund management companies in the world.
However, we have also listed out the risks involved, which are overlap and excessive investment. However, these risks are just an assumption and there is no definite possibility of these.
As far as we are concerned, we think that Baillie Gifford can still provide some of the efficient returns as a fund management company, but superior options exist in the market.
Of course, all investment strategies should be personalised to your needs.
To get more advice on whether or not you might be able to benefit by acquiring the services of Baillie Gifford, you can contact us and obtain the best financial planning services and investment advice offered by us.
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