Monday 22 October 2018

Baillie Gifford Positive Change - New Purchase

Many of the ethical and socially responsible funds use a simple screen to avoid the so called 'sin stocks' such as tobacco, arms trade, pornography and environmental polluters for example. This is a good start but I believe the industry needs to go further and apply a positive screening process to identify those companies which are making an effort to tackle some of the challenges we face in a positive way.

Baillie Gifford launched their Positive Change fund in 2017. It is designed to contribute towards a more sustainable world for future generations and also provide a decent return for investors. This seems to be the holy grail.

This is from their 2017 Impact Report

"Businesses and investors have the ability – indeed, the responsibility – to help steer our world onto a more sustainable path. Government funding and philanthropic donations, though hugely welcome, will not be sufficient: trillions, not billions, of investment will be required to address the numerous challenges that our world is facing. 

We believe that inclusive capitalism is part of the solution and has the ability to improve lives. It is the beneficial impact of businesses and of human entrepreneurial spirit that we seek to harness in our bid to help our clients make attractive investment returns while contributing towards a better world for current and future generations".

Sustainable Development Goals

In September 2015, 193 countries agreed to 17 goals – the Sustainable Development Goals (SDGs) – as part of the United Nation’s 2030 Agenda for Sustainable Development which aims to:

  • end poverty
  • to protect human rights
  • to build peaceful and inclusive societies, and
  • to ensure the protection of the planet

These goals provide the framework which underpins the Positive Change strategy and the managers  apply a rigorous approach when selecting companies for the portfolio and analyse what contribution they make towards these goals via their product or services.

The funds investments fall into 4 main areas -

Social Inclusion and Education

Environment & Resource Needs

Healthcare and Quality of Life

Base of Pyramid (Needs of the World's Poorest)

When analysing a company, the management team assess the investment case first and then go on to apply the positive screening. The company must intend to provide a positive change rather than it being incidental to what they do.
‘Growing up in China in the 1990s, I witnessed the tremendous potential that companies have to change people’s lives for the better’ Lee Qian, joint investment manager.

Co-manager Kate Fox believes the financial community will play a crucial role in creating a sustainable world for future generations.

The fund is invested globally - USA (42%), Europe (29%), Emerging Markets (17%) and Asia Pacific (11%). The fund is expected to remain fairly concentrated with 30 to 50 holdings.

Ongoing charges are 0.60%.


The fund is off to a good start with a return of 60% since launch and 15% over the past 12 months. The longer term target is 100% over a five year period (currently on track but personally, I suspect this may be overly optimistic).

Positive Change since launch

I have now added this to my ISA with AJ Bell at the price of 154p using the proceeds from the sale of Blackrock Commodities Income Trust.

So, another addition to my 'green' global portfolio sector and one I will be looking to top up as it hopefully grows and becomes more established. My two holding comprise just 3% of my's a start, and I will be looking to increase to around 10% over the coming months. 

Obviously pure equity funds will be more volatile than my Lifestrategy 60 fund and I will need to monitor my overall equity/bond allocation and rebalance as necessary but if they can deliver a return of over 10% p.a. on average and at the same time support businesses that are part of solving the problems we face than I think this is the direction for me personally.

Ethical/green investing will not solve all the problems associated with climate change but I believe it will have a part to play. As they say...the future is green or is not at all...

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!

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