Baillie Gifford UK Growth needs more time – Baillie Gifford UK Growth has published results covering the year to the end of April 2019. For the first two months of that period, the portfolio was managed by Schroders and it managed to underperform the All-Share Index by 2.0%. Over the subsequent 10 months, under Baillie Gifford, the trust lagged the index by 0.4%. The combined effect was to leave investors with a return on NAV of 0.2% against a 2.6% return on the index. In share price terms things were rosier, however, as the discount narrowed on the news that Baillie Gifford were being handed the management contract; the return to shareholders was 5.0%. The total dividend was 4.45p – it may fall in the current accounting year as the new manager’s focus is on lower yielding stocks.
Most of the company’s prior 49 holdings were sold and 42 new holdings purchased. The success of this needs to be judged over the medium-term and so the chairman is asking investors to approve the continuation of he company at this year’s AGM. [We’d expect this to sail through.]
Disappointingly, the manager does not include any performance attribution in its statement. It does make reference though to the trust’s participation in the IPO of AJ Bell, which would have been a profitable investment. The portfolio also includes Hargreaves Lansdown, however, which has suffered in recent months on the back of the Woodford debacle. Two other companies that came under pressure were Just Retirement, where the regulator published a consultation paper on lifetime mortgages, and Ted Baker, where the founder stepped down after allegations of inappropriate behaviour. In both cases, the manager engaged with the companies and in the latter case, reduced the trust’s stake.
BGUK : Baillie Gifford UK Growth needs more time