Baillie Gifford UK Growth Fund plc
- 06 mins 59 secs
Baillie Gifford UK Growth Fund plc
Milena Mileva and Iain McCombie, co-managers of the Baillie Gifford UK Growth Fund plc, give an overview of the trust following the board’s decision to move the mandate to Baillie Gifford.
Tel: 0800 917 4752
1 Greenside Row
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I'm joined today by malena mill, ever on dh in combi, co managers off the baillie gifford in malena in following the board's decision to move the mandate from schroeder's baillie gifford what's changing in terms of the company's investment policy and objective well, there'll be no changes to the company's investment pulsing objectives, so that means that we'll be trying to invest it for capital growth from investing in u k actors with the aim of trying to get a tour to return in access off the foot seol share index. Okay, so what is changing ? But you'll see a very different put fully from what happened before, so, for example, were going very much having explicit focus on growth actors because that's very much the baillie gifford investment style put full itself also very different. There were about forty companies within that very concentrated portfolio. They also have high actors share, which means off about eighty five percent, which means it's very different from the end eggs. And lastly, we have a very much an explicit long term investment horizon off five years, so you'd expect very low portfolio turnover and what that means, putting it all together. Is that you have a very interesting differential put fully for shareholders. Thank you, malena. How would you describe the investment process ? The essence of our approach released we are purely stock driven, very long term growth investors. Our aim is to identified businesses with large opportunities, sustainable competitive positions and very strong corporate cultures. Businesses which can deliver superior earnings growth over many years is a result of which our portfolios are very different from the index. Okay, well, how will the decision making process working practices, co managers of this vehicle ? The first thing that's important to say is that the uk active team, billy gifford, has a tried and tested philosophy on process, so we know what we're trying to do. He also is a very experienced team, and i can't stress it enough. There's, a team of seven under four fund managers who have in total, over eighty years of investment experience all it baillie gifford not what the benefit of that is that when we discuss the stock we do together. So that means you get you get the benefit of the combined investment knowledge and expertise on billy. Get a team. So in terms. Of how we work together that malini and i have worked very closely together for six years now, so we knew each other on we knew exactly what we're trying to do. What we're trying to do really for the company is to put together put full of our best ideas on you know, i think we're very excited about the portfolio we put together as this is the best ideas portfolio. Are you able to elaborate on some of the themes and some companies investors are likely to see in this pool ? Yes, of course i'll give you some flavor there's always a risk of over generalizing, but there are a number of broad areas that have provided for our ground for us is bottom of stock pickers. The first one is what we call growth nish financials companies that we think stand out in a critical, monetized industry. A great example here is hargreaves lansdown, which we think enjoys multi decade growth opportunities in its platform business. Secondary's, consumer businesses, consumer facing businesses provided they have strong brands and law customers within these types of companies can compound earnings over many years a number of the consumer facing businesses were keen on have also leverage digital technology to make their industries much more efficient and really driving next customer proposition and relevant examples here just eat it or to trade a bright move. Thirdly, we actually think the uk stock market is home to some really exciting but underappreciated business to business champions when you say business, business champions were exactly with this sort of under the radar companies, from the point of view that they have quite low levels of awareness amongst the general public but but in fact they have exceptionally high levels of awareness amongst the professionals use their services. Indeed, we would argue many of these companies have world leading positions in their fields on great example here he's lost based engineering form ratio and then finally we've also identified a number of latent growth opportunities where we think management action increase the lives long term value good example here is pop company mitchell's butlers thank you in molina's touched upon some exciting growth companies as you see it as a team, but is now really the right time to be investing for growth. But neither molina nor i have a crystal ball, so we have absolutely no idea what the stock market is going to do over the short to medium term, nor do we know which investment style is going to be the best in the years ahead. So what we're going to do is stick toe always done, which is to be true to our investment believes, which means to identify on own attractive growth companies and on them for a song as possible for shareholders. Why do we do that ? Our core belief is that in the long run, share prices follow fundamentals, so if you can get a portfolio of companies with above average growth, we think that ultimately the stock market or the ward shareholders. Lastly, malena, as a u k invested pretty heard it said many times that the uk market is very efficient, so shouldn't investors merely be investing in an e t f or index tracker when looking for exposure to uk equities ? No, we disagree with it. In fact, quitting the uk stock market provides ample opportunities for high conviction active managers such as ourselves to add value and our reasoning release the uk index is dominated by a small number of very large. And, well, long cos frankly, we find rather dollars investments. What is more important, perhaps, is that we also think some of these businesses could be significantly disrupted in the long run, so they are disrupted. What do you mean by that ? What i mean is that they are. We believe there are some significant changes afoot in a number of sectors, just health care, energy, financials, which might mean that these big index constituents are threatened in the future, so, too, are mined for those investors who are willing to cast their eyes above the old face and then an inspiring names. There are actually a number of very exciting, underappreciated uk companies that we think can deliver superior earnings and market returns for many years. So in summary your growth, investors managing a concentrated spoke portfolio, best ideas, active investment, low turnover, five year investment horizon, absolutely, and thank you.