ADVERTORIAL FEATURE
Finding value in growth investing
The value of your investment and any income from it can go down as well as up and as a result your capital may be at risk .
In an uncertain world , some investors seek security in the tidy pigeonholes of ‘ growth ’ or ‘ value ’. Malcolm MacColl does not . His sole focus is on finding the wealth creators of the future . “ At Baillie Gifford , we ’ re trying to identify businesses with the ability to grow underlying profits and cash flows over long periods . But it has to be growth in value . There ’ s no point in a business growing without the underlying margin structures or the returns and the capital being there to support higher valuations into the future ,” MacColl explains . Questioning whether growth assets are in or out of favour is a distraction for the deputy manager of The Monks Investment Trust and manager of the Global Alpha Growth Fund and Global Alpha Paris-Aligned Fund . What matters is how these businesses deliver what they promise . “ We should be focusing on fundamentals and the direction of travel for businesses over a five- to ten-year horizon . It is about how they deliver relative to their potential , because it ’ s the underlying growth and change within that business that will dominate a company ’ s future valuation .” Growth can take the form of highgrowth companies , such as Amazon , to more subtle growers , such as the US health insurer , Anthem . MacColl is a fan of both . He uses Amazon to illustrate the futility of pegging a company either to growth or to value . Although not traditionally categorised as a value stock , in many
/ 20 / trustnet . com