Investing in Innovation

First imagine how the future could look. Then take the right steps at the right time to make that vision reality. The formula works as well for long-term savers as it does for entrepreneurs building great businesses.

Baillie Gifford offers its clients the chance to invest in innovation via companies with a clear idea of their role in the future. It’s often their own innovations – products, services and business models – that are leading us there.

Through our investment trusts and other funds, we give our investors a stake in these exceptional companies. They could be healthcare innovators improving therapies by tailoring them to our genetic makeup, such as vaccine maker Moderna, or gene sequencers such as Illumina, helping to decode disease.

They could be advanced battery cell makers, such as Sweden’s Northvolt. They could be Spotify, streaming music for millions, or Shopify, helping small traders set up stall in cyberspace.

These are the companies finding shortcuts to a better future – the healthier, more efficient, more equitable and sustainable world we want our children to inherit.

Over the decades, Baillie Gifford has amassed specialised skills, insights and networks. We put all these to work to construct carefully balanced portfolios. These trusts and funds contain what we think are the world’s best companies: the ones that see most clearly the dynamics of global change.

We’re getting better and better at identifying these companies, and at partnering with them at each stage of their development. We call this Actual Investing. Continual exchange of expertise and experience with visionary business leaders works to our mutual advantage. The goodwill generated by our support in good times and bad helps us identify new opportunities, often with companies yet to list on the stock exchange.

We like businesses that adapt, evolve and innovate to achieve their vision, and which aren’t just focused on quarterly earnings targets. That includes well-established companies that have reinvented themselves, sorted out problems, or exploited openings into adjacent markets. What they all have in common is a knack for providing  – sometimes anticipating – what customers want.

When their progress is recognised more widely, we want our clients to stay with us and reap the benefits, helping them achieve their long-term financial goals. When they come to retire, the transformations accelerated by the companies we spotted, maybe decades previously, will be widely taken for granted. Hindsight after all, is a wonderful thing.

Baillie Gifford favours foresight which is far rarer and much more rewarding. Achieving it takes decades of experience, great sources of academic and commercial intelligence, and the ability to ask ‘what if?’.

What happens if gene sequencing for newborn babies becomes possible? What happens if low Earth orbit satellites slash the cost of internet access? What if solar cells on the ground become worth more than the oil under it?

The truth is, we don’t yet know. But long-term client benefit comes from our knowing what questions to ask, and knowing the businesses providing answers in years to come.