Capital at risk

Investment strategy

Strategic Bond

This is a core corporate bond strategy that brings income generation and diversification to balanced portfolios. It offers broad exposure to global corporate bond markets, using our best ideas. We seek to add value through bond selection and active credit risk management. 

Our research-intensive process and extensive experience mean we gain deep insight into companies, differentiating our views from other market participants. 

Close up shot of the lines of a palm leaf.

A sharp focus on inefficiencies

Our goal is to provide clients with a resilient income and potential capital growth by lending to a diverse range of companies.

Corporate bond markets exhibit persistent structural inefficiencies. Our approach is designed to exploit these. We find companies offering attractive compensation relative to their strengths, creating a portfolio that we believe will outperform the market in the long term. 

Strategic Bond Q3 update

The Strategic Bond Team reflects on recent performance, portfolio changes and market developments.

A purposeful, conviction-led portfolio

The global corporate bond market, with over 3,700 companies and more than 20,000 bonds, provides a rich canvas of opportunities for active bond selectors.

Through deep research, we seek to identify resilient companies that can adapt as societies and technologies change. We blend this with our top-down view of the economic environment. Our collaborative approach helps us to identify macroeconomic trends and transitory forces. We then construct a diverse core portfolio of about 60-85 companies.  

A patient and flexible approach

While we typically lend to companies for many years, we remain live to evolving market conditions, actively managing exposure by region, sector and credit rating to make the best of prevailing valuation opportunities.

Corporate bond markets are structurally inefficient and often fail to reflect fundamental information. This provides opportunities for long-term investors such as us.
Lesley Dunn

Meet the managers

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Strategy portfolio holdings

A list of the top 10 holdings that the representative portfolio invests in.

All figures up to: 30 November 2024

#Holding% of portfolio
1Rothesay Life 8% 20252.9%
2DNB Bank 4% 2026/272.8%
3Bharti Airtel 5.65% 2025 Perp2.5%
4Banco Santander 1.5% 20262.3%
5Barclays 7.125% 2025 Perp AT12.3%
6Telereal FRN 2031 (C1)2.2%
7Berkeley Group 2.5% 20312.1%
8Realty Income 5.125% 20342.0%
9Yorkshire Water 6.375% 20341.9%
10Schroders 6.346% 2029/34 T21.8%

Strategy holdings by region

As at: 30 November 2024

1UK44.10%
2United States13.10%
3Luxembourg6.10%
4Germany5.30%
5Spain4.30%
6Netherlands3.40%
7Italy3.00%
8Norway2.80%
9Channel Islands, IoM2.70%
10India2.50%
11Others9.70%
12Cash & Derivatives3.10%
Total 100%

Strategy holdings by region

All figures up to: 30 November 2024

Total: 100%

Strategy holdings by sector

As at: 30 November 2024

1Financial Services13.20%
2Banking11.70%
3Real Estate10.80%
4Insurance10.80%
5Retail6.40%
6Asset Backed5.70%
7Telecommunications5.00%
8Commercial Mortgage Backed4.10%
9Agency3.10%
10Services3.00%
11Transportation3.00%
12Utility2.90%
13Health Care2.40%
14Capital Goods2.30%
15Technology & Electronics2.00%
16Government Guaranteed2.00%
17Others8.50%
18Cash & Derivatives3.10%
Total 100%

Strategy holdings by sector

All figures up to: 30 November 2024

Total: 100%

Please note

The information contained on this page is intended as a guide only and should not be relied upon when making investment decisions. All holdings information is unaudited. Source Baillie Gifford & Co. Please note that totals may not add due to rounding.

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Insights

Key articles, videos and podcasts relating to the strategy:

Strategic Bond Q3 update

The Strategic Bond Team reflects on recent performance, portfolio changes and market developments.

Explore further

Curious to learn more about our products and what we can offer you? Please get in touch.

Important information

Baillie Gifford Overseas Limited (ARBN 118 567 178) is registered as a foreign company under the Corporations Act 2001 (Cth) and holds Foreign Australian Financial Services Licence No 528911. The information in this area is provided to you on the basis that you are a “wholesale client” within the meaning of section 761G of the Corporations Act 2001 (Cth) (“Corporations Act”). Please advise Baillie Gifford Overseas Limited immediately if you are not a wholesale client. In no circumstances should the information in this area be made available to “retail clients” as defined by the Corporations Act.

The information in this area contains general information only. It does not take into account any person’s objectives, financial situation or needs.