Baillie Gifford European Equities Fund

The Baillie Gifford strategies have had a difficult period. One area that we would suggest further investigation is around the profitability of the companies they invest in, and levels of debt. The levels of profitability tend to be lower in Baillie Gifford Funds and there tends to be more debt. The main reason is that they tend to look to the future and what will be the next “winner”. This can be seen as a high growth strategy at any price. In a period where markets are going up this can deliver attractive returns. However, in the period we are in this can make it more difficult to navigate. We are not saying that this fund follows the other strategies but it does need to be investigated.

They accept this has been a difficult time for the fund but believe that Europe offers a diversified mix of opportunities across healthcare, industrials, and IT. Over the last 10 years 70 companies delivered returns more than 10 times earnings and these are the companies they want to uncover. Some examples of companies which they believe can be the next winners include Avanza, Selectus and Spotify….read more

Fund Facts Morningstar

Notes

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