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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 Q1 investment update

The Strategic Bond Team reflects on recent performance, portfolio changes and market developments over the last quarter.

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.
Torcail Stewart

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 April 2024

#Holding% of portfolio
1Rothesay Life 8% 20253.0%
2EDF 6% 2026 Perp2.7%
3Admiral Group 8.5% 2034 T22.7%
4DNB Bank 4% 2026/272.7%
5Bharti Airtel 5.65% 2025 Perp2.4%
6CPI Property 1.5% 20312.2%
7Helvetia 2.75% 2031/41 T22.2%
8LeasePlan 7.375% 2024 Perp AT12.0%
9Investec 2.625% 2026/32 T22.0%
10Banco Santander 1.5% 20261.9%

Strategy holdings by sector

All figures up to: 30 April 2024

1Financial41.60%
2Industrials40.10%
3Quasi & Foreign Government6.10%
4Securitized6.10%
5Utility4.20%
6Cash & Derivatives1.90%
Total 100%

Strategy holdings by sector

All figures up to: 30 April 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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Important information

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The information in this area of the website is intended for qualified professional investors and consultants based in South Korea. It is not intended for use by any other persons including members of the general public or investors from other jurisdictions.

Please remember that all investment strategies have the potential for profit and loss and your or your clients’ capital may be at risk.

Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK clients. Both are authorised and regulated by the Financial Conduct Authority. Baillie Gifford Overseas Limited is licensed with the Financial Services Commission in South Korea as a cross border Discretionary Investment Manager and Non-Discretionary Investment Adviser.

Baillie Gifford Asia (Hong Kong) Limited 柏基亞洲(香港)有限公司 is wholly owned by Baillie Gifford Overseas Limited and holds a Type 1 and a Type 2 licence from the Securities and Futures Commission of Hong Kong to market and distribute Baillie Gifford’s range of collective investment schemes to professional investors in Hong Kong.
Baillie Gifford Asia (Hong Kong) Limited 柏基亞洲(香港)有限公司 can be contacted at Suites 2713-2715, Two International Finance Centre, 8 Finance Street, Central, Hong Kong, Telephone +852 3756 5700.

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