Investment in companies that integrate environmental, social and governance (ESG) factors continues to gain momentum on both public and private markets. ESG concerns underpin the majority of discussions around the future of the investment industry. Baille Gifford’s Positive Change Fund, launched in 2017, represents an option with a solid track record for those seeking to invest for the long term while also paying attention to the fund’s social impact
The Baillie Gifford Positive Change Fund seeks to outperform the MSCI AC World Index, by at least 2% per year over rolling periods of five years. In addition, it seeks to “contribute to a more sustainable and inclusive world”. The managers seek out companies that can deliver positive change in one of four areas: social inclusion and education, environment and resource needs, healthcare and quality of life.
Performance
Throughout the pandemic, the Baillie Gifford Positive Change Fund far outperformed its target benchmark with gains of 79.3%. Its impressive returns are a continuation of its form over the past four years, when it has far exceeded its index, target benchmark and the sector average in all but one year.
| 31/03/2016 31/03/2017 | 31/03/2017 31/03/2018 | 31/03/2018 31/03/2019 | 31/03/2019 31/03/2020 | 31/03/2020 31/03/2021 | |
| Class B-Acc | n/a | 29.3% | 11.0% | 15.9% | 79.3% |
| Index* | n/a | 2.9% | 11.1% | -6.2% | 39.6% |
| Target Benchmark** | n/a | 5.0% | 13.3% | -4.3% | 42.4% |
| Sector Average*** | n/a | 2.7% | 9.0% | -6.0% | 40.6% |
**MSCI AC World Index +2%.
***IA Global Sector.
Holdings
Tesla (7.96%), ASML Holding (6.78%) and Taiwan Semiconductor Manufacturing (6.55%) are the three companies that the fund is most invested in and have supported its impressive growth over the past 12 months.
With only 35 stocks, the fund is highly concentrated and therefore more susceptible to volatility, however, as seen over the past 12 months, it is also gives investors the opportunity to make outstanding returns.
Costs
The fund has an ongoing fee of 0.53%, which is pricier than other Baillie Gifford funds, but more affordable than many others which focus on sustainability. The managers are able to draw on the fund firm’s extensive research capabilities, and they conduct a separate positive change analysis for each stock before making decisions to invest.