Trustnet Magazine Issue 43 September 2018 | Page 10

SCOTTISH
BAILLIE
MORTGAGE
GIFFORD
INVESTMENT
UK GROWTH
TRUST
FUND
Your portfolio
12 / 13
An independent board of directors is often cited as one of the
advantages of investment trusts. But, asks Cherry Reynard, how much
value do they really add?
Getting onboard
T
THE BAILLIE GIFFORD
UK GROWTH FUND WAS
FORMERLY THE SCHRODER
UK GROWTH FUND
KEEPING WATCH FOR HIGH
GROWTH UK COMPANIES.
The Baillie Gifford UK Growth Fund PLC is an investment trust which
brings our long-term growth philosophy home to the UK.
As high conviction active managers we are looking for fi rms with sustainable
competitive positions and strong corporate cultures. Companies that we
believe can deliver superior earnings growth over many years.
he oversight of an
independent board has
been a key selling point
for investment trusts. The
board should represent the interests
of the shareholders, replacing poorly
performing management teams,
negotiating fees and ensuring good
communication. But, as the recent
spat between Invesco Perpetual and
the board of the Invesco Perpetual
Enhanced Income trust has shown,
it is an imperfect system. Do boards
really add value?
The Invesco example seemed
to be a personal clash. The board
exerted some pressure over fees, the
relationship deteriorated and Invesco
took the rare step of resigning as
manager of the trust. Shareholders
were understandably concerned
to lose the services of the highly
regarded pair of Paul Read and Paul
Causer. The relationship has since
been repaired, but not without the
resignation of two board members.
The affair highlighted the potential
tensions between board members and
investment managers.
There are other examples where board
oversight has not seemed to deliver
tangible benefits for investors. A notable
case would be British Assets, moved
from F&C Investments to BlackRock
in 2015 on performance grounds, it
was then moved to Aberdeen after
performance weakened further under
This is a best ideas portfolio investing in what we consider to be the most
exciting businesses listed on the domestic stock market.
Please remember that changing stock market conditions will affect the value
of the investment in the fund and any income from it. Investors may not get
back the amount invested. If in doubt, please seek fi nancial advice.
If you’re looking for growth from a fl agship UK fund, call 0800 917 2112
or visit us at www.bgukgrowthfund.com
A Key Information Document is available by contacting us.
Long-term investment partners
Your call may be recorded for training or monitoring purposes. Issued and approved by Baillie Gifford & Co Limited, whose registered address is at Calton Square,
1 Greenside Row, Edinburgh, EH1 3AN, United Kingdom. Baillie Gifford & Co Limited is the authorised Alternative Investment Fund Manager and Company
Secretary of the Company. Baillie Gifford & Co Limited is authorised and regulated by the Financial Conduct Authority (FCA). The investment trusts managed
by Baillie Gifford & Co Limited are listed UK companies and are not authorised and regulated by the Financial Conduct Authority.
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