Baillie Gifford reports first firm-wide underperformance of benchmarks since 2009
One of the four funds holding red ratings for two years running, Baillie Gifford British Smaller Companies was closed on 27 June 2023 after failing to prove it provided value overall.
Calculated using annualised five-year total returns with all funds equally weighted, Baillie Gifford's average performance of its product range relative their benchmark indices fell into the red for the first time in more than a decade, with 18 of the total 36 funds receiving a red rating for performance.
A further three received an amber rating, while 11 were deemed green and four were unjudged due to lack of data.
By comparison, only five funds were rated red last year, with four of these funds retaining a red rating again this year. The other fund, the Baillie Gifford UK Equity Focus fund, was merged with Baillie Gifford UK Equity Alpha fund in April 2022.
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One of the four funds holding red ratings for two years running, Baillie Gifford British Smaller Companies was closed on 27 June 2023 after failing to prove it provided value overall.
UK Equity Alpha, UK Equity Core and Investment Grade Long Bond comprise the remaining three persistent underperformers.
Baillie Gifford argued its UK equity funds had been underperforming due to an absence of large oil companies and banks in the portfolios, «as the investment team aims to hold future winners», though noted a change in lead investment manager for the Alpha fund last year.
The Alpha fund has returned -3.2% over the last five years and the Core fund has returned 6.8%, compared to an IA UK All Companies average of 10%, according to data from FE fundinfo.
Meanwhile, the IG Long Bond fund carries «slightly more risk
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