Baillie Gifford: why these growth stocks will bounce back

TL;DR

The Bailey Gifford positive change fund focuses on sustainable investments that address social and environmental challenges, with a growth investment style. Performance has been affected this year due to global risk aversion and a sell-off in growth equities. The fund still believes in the long-term prospects of sustainable companies.

Transcript

foreign manager of the Bailey Gifford positive change fund Lee thank you for coming into the studio thank you for having me so tell me a bit about the funds where do you invest and what makes it positive change what makes it a sustainable strategy so positive change is a an investment strategy that has two objectives to generate attractive long-ter... Read More

Key Insights

• 🔬 Positive change funds focus on investing in companies that address social and environmental challenges.
• 🍉 Short-term underperformance of the fund is attributed to global risk aversion and a sell-off in growth stocks.
• 🍉 The fund remains optimistic about the long-term prospects of sustainable businesses, despite short-term market volatility.
• 🥺 The pandemic has led to both challenges and growth opportunities for companies in the portfolio.
• ☠️ Interest rates and market sentiment influenced the performance of growth equities.
• ❓ Decision-making within the fund involves considering both investment prospects and societal impact.
• 🪜 The fund has added attractive valuations in companies like Mercado Libra and Shopify, while selling Alibaba due to regulatory actions and growth concerns.

Questions & Answers

Q: What is the investment strategy of the Bailey Gifford positive change fund?

The fund focuses on investing in innovative companies that address social and environmental challenges, aiming for long-term investment returns and contributing towards a sustainable future.

Q: Why has the fund's performance been less good this year?

This year, global risk aversion, geopolitical tensions, and rising interest rates have led to a sell-off in growth equities, affecting the fund's performance. However, the underlying operating progress of the portfolio's companies remains strong.

Q: Will changes in interest rates affect the fund's investment philosophy?

The fund's investment philosophy is based on the belief that companies addressing sustainability challenges will prosper in the long term, regardless of interest rates. Changes in interest rates may impact the exit multiples, but the focus remains on revenue and profit growth.

Q: Does the fund still hold pandemic winners like Peloton, teledoc, and beyond meat?

The fund still holds teledoc as it believes the transition towards telemedicine is a long-term growth opportunity. However, it has sold beyond meat due to the company's execution falling short of expectations. The fund holds Peloton but closely monitors its operating challenges and has set specific metrics for its continuation in the portfolio.

Summary & Key Takeaways

• The Bailey Gifford positive change fund invests in companies that provide innovative solutions to social and environmental challenges.

• Performance has been affected this year due to global risk aversion and a sell-off in growth equities.

• The fund remains optimistic about the long-term prospects of sustainable businesses and believes in the transition towards a more sustainable future.