Baillie Gifford funds attract record £991m in July

Baillie Gifford's current Edinburgh HQ

Morningstar’s latest fund flow numbers show Edinburgh investment giant Baillie Gifford was the most popular asset management firm in July, attracting £991 million of new money during the month — its highest ever total in a single month.

Baillie Gifford has assets under management and advice of more than £260 billion and its high-profile funds are major shareholders in prominent global companies including Tesla, Amazon, Tencent, Netflix and Alibaba. 

Hargreaves Lansdown said six of its top-selling funds in July were run by Baillie Gifford.

“The strong performance of its typically growth-orientated equity funds has been the driver of the firm’s popularity,” said Morningstar analyst Bhavik Parekh .

“Within their respective categories, many Baillie Gifford funds were among the very top sellers in July, highlighting the fact that their house style has been very strongly in favour with investors.”

Baillie Gifford employs about 1,300 people and is headquartered in Edinburgh with offices in Buenos Aires, Dublin, Frankfurt, Hong Kong, Krakow, London, New York, Shanghai, Toronto and Zurich.

Baillie Gifford’s recent performance is the talk of the asset management industry.

Financial News reported that, measured on 12-month performance to June 30, Baillie Gifford has four of the five top performing funds in the UK’s IA Global peer-group; two of the top five in the IA Global Equity Income table, the top-performing global equity investment trust, and the second-best performing US equities fund on sale in the UK.

Baillie Gifford’s £4.3 billion Long Term Global Growth Investment fund, managed by Mark Urquhart and US equities head Tom Slater, has made 61.3% in the past 12 months — with its average rival making 6.6% and the MSCI World up 5.1% in sterling terms, according to figures from FE Analytics.

“They are great stockpickers, but they also work in an area of the market which has had a very good run …” Simon Molica, a fund manager at AJ Bell, told Financial News.

“And growth has had an exceptional run in recent years … They have had an incredible tailwind. They don’t hide that; they don’t pretend otherwise.”

Baillie Gifford’s flagship fund, Scottish Mortgage Investment Trust plc, run by James Anderson with Slater, has assets of £14.5 billion and its share price has soared more than 55% so far this year to give the closed-end fund a current stock market valuation of around £13.2 billion.

Scottish Mortgage is the UK’s best-performing investment trust in global equities — with its closest rival achieving 20.2%.

Molica cautioned: “The reason I would guess that sales figures have been so strong: people get tempted into what has done well in the past, and that doesn’t necessarily mean it will be the case in the future.

“If the tide does turn, and maybe inflation comes back, that might mean value comes back in favour.

“I think the majority of Baillie Gifford funds would struggle in that environment.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.