Renowned for the quality of its in-house research, Baillie Gifford brought its smaller companies’ teams together in 2011 to form the global discovery team. This fund consists of what the team believe to be the most innovative and fast-growing smaller companies in the world. It has a strong growth bias and is aggressive in nature.
Our opinion
Baillie Gifford Global Discovery lends itself well to Baillie Gifford’s strengths, namely rigorous company research, with a long-term perspective. The focus on growth and smaller companies separates this fund from many others in the global sector. While this fund is perhaps not for the fainthearted, investors have been richly rewarded over the medium and longer term.
Company description
Founded in 1908 and employee-owned, Baillie Gifford is based in Edinburgh but has offices in London and New York. Awarded the Elite Provider for Equities Rating each year from 2015 to 2021, it specialises globally in equities, fixed income and multi-asset portfolios. The firm is owned by 44 of its senior executives and operates as a partnership.
Fund manager
Douglas Brodie graduated with a BSc in Molecular Biology & Biochemistry from Durham University in 1997 and with a DPhil in Molecular Immunology from the University of Oxford in 2001. He joined Baillie Gifford in 2001, is head of the global discovery team and is supported by a number of experienced regional specialists. Douglas is a CFA charterholder.
The world has become more dynamic. The unrelenting impact of technology is driving new business creation and forcing change onto what were previously stable industries. This opens up new opportunities for small fleet-footed innovators and we believe it opens up opportunities for us too.
Douglas BrodieFund manager
Investment process
Douglas and his team take an unusual approach when looking for investments. They don’t use generic screens to create lists of potential stocks, nor do they use broker research. Instead, the team thinks about the kinds of companies it would like to invest in and undertakes fundamental stock research to find opportunities. Each member of the team has expertise in areas outside of finance, so they can truly understand their companies. They look for businesses doing something very different in their space, which may well be loss-making at that point in time, so long as the team can see future potential. The team has a keen eye on diversification, so Baillie Gifford Global Discovery has between 75-150 stocks in no less than six regions at any one time.
ESG
ESG - Limited
Doug does not use an explicit or integrated ESG model when constructing this fund. He looks for companies early in their lifecycle that can solve large, global problems and hold them as they grow. As such, having an element of sustainability is important to the business case of the companies he looks to invest in. This will mean the fund has a bias away from firms that have negative long-term impacts on the environment, society and governance practice, but it is not a specific target of the fund.
Risk
As the underlying companies are small in size and are targeting growth, Baillie Gifford Global Discovery is significantly more volatile and riskier than the global stock market. Also, while some stock, sector and country limits are in place, the fund can stray away from its index.
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