Reducing carbon, not growth

The Sustainable Multi Asset Fund provides exposure to a broad range of asset classes, actively managed in a convenient single portfolio. This growth strategy seeks to deliver a good level of return within clear risk and carbon limits. For investors looking for attractive long-term fundamental growth, with the comfort of lower volatility and fully integrated Environmental, Social and Governance (ESG) features, we believe the Sustainable Multi Asset Fund is a natural choice.

The Fund has three equally-weighted objectives

1 There is no guarantee that a positive return will be achieved over rolling three-year periods, or any time period, and capital may be at risk
2 We measure carbon intensity as tCO2e/USD million Enterprise Value Including Cash (EVIC)
3 The starting carbon budget is the carbon intensity of a representative Multi Asset fund, set in absolute terms

Sustainability is integral to the investment process

• We start with our review of key themes and an assessment of the world’s economies and markets.
• This leads to active asset allocation, balancing the available investments with the three objectives in mind.
• Risks and opportunities presented by sustainability factors are considered both on a top-down and bottom-up basis, with portfolio investments assessed in-house, and the portfolio’s carbon intensity measured, managed and reported frequently.

The team draws upon internal resources for asset class implementation, ESG assessments and risk management.  Where required, we also draw upon external experts for diverse insights, independent carbon quantification and the occasional implementation of specialist strategies. 

The Sustainable Multi Asset Fund blends our macro views with several core long-term investment themes and a fundamental understanding of the characteristics of our asset class opportunity set.

Our Sustainability Framework

This search for the best investment opportunities is undertaken within a clear sustainability framework as follows:

*Sustainability Accounting Standards Board
**Using the SASB-based framework, the investment team classify holdings into five Sustainability categories, ranging from Unsustainable (excluded from investment) to Enabler (providing transformative products or services), based on each position’s material ESG risks and opportunities.

Capturing the key investment themes of our time

We believe this Fund is well aligned with the most significant investment themes of the rest of our lives, such as The Green Revolution, Increasing Automation and Changing Geopolitics. Being a true multi asset portfolio allows us to express these themes flexibly. For example, for the energy transition over the coming decades, we can express our views through investment in commodities, infrastructure, fixed income and/or equities. The opportunity set is vast, giving lots of scope for generating strong, stable and sustainable returns for investors.

The result is a genuinely diversified portfolio, focused on generating long-term growth in a way that our clients can be both proud of and confident in.

As at 30 June 2022. Figures may not sum to 100 due to rounding.
Figures in brackets are specific positions shown by exposure to help better reflect actual underlying investments, taking derivatives positions into account.
*Includes net active currency position.

The Fund launched in May 2022 and is now over £170m in size (as at 31 August 2022). If you want to know more, please visit our fund page. 

Risk Factors 

All investment strategies have the potential for profit and loss, capital is at risk.

This communication was produced and approved in October 2022 and has not been updated subsequently. It represents views held at the time of recording and may not reflect current thinking.

Past performance is not a guide to future returns. The Baillie Gifford Sustainable Multi Asset Fund was launched on 20 May 2022. Please note a full 12 month period of performance is unavailable, therefore no performance is shown.

The Fund does not guarantee positive returns. The Fund aims to achieve (after deduction of costs): an annualised return over rolling five-year periods that is 3.5% more than UK Base Rate; a positive return over rolling three-year periods; and annualised volatility of returns over rolling five-year periods that is below 10%.

The Sub-fund also aims to have a weighted average greenhouse gas emissions intensity that is lower than that of the Fund's stated carbon budget. The carbon budget is set in absolute terms and will decrease at a steady annual rate of 7% per annum.

The manager believes this is an appropriate target given the investment policy of the Fund and the approach taken by the manager when investing. There is no guarantee that these objectives will be achieved over any time period and actual investment returns may differ from these objectives, particularly over shorter time periods.

Investment markets can go down as well as up and market conditions can change rapidly. The value of an investment in the Fund, and any income from it, can fall as well as rise and investors may not get back the amount invested.

The specific risks associated with the Fund include:

• The Fund invests according to sustainable and responsible investment criteria which includes employing carbon screens. This means it cannot invest in certain sectors and companies. The universe of available investments will be more limited than other funds that do not apply such criteria/ exclusions, therefore the Fund may have different returns than a fund which has no such restrictions.
• Market values for illiquid securities which are difficult to trade, or value less frequently than the Fund, such as holdings in weekly or monthly dealt funds, may not be readily available. There can be no assurance that any value assigned to them will reflect the price the Fund might receive upon their sale. In certain circumstances it can be difficult to buy or sell the Fund's holdings and even small purchases or sales can cause their prices to move significantly, affecting the value of the Fund and the price of shares in the Fund.
• The Fund invests in emerging markets where difficulties in dealing, settlement and custody could arise, resulting in a negative impact on the value of your investment.
• Investment in vehicles which themselves invest in a range of assets described previously which may become illiquid may not be easily converted into cash when required.
• Bonds issued by companies and governments may be adversely affected by changes in interest rates, expectations of inflation and a decline in the creditworthiness of the bond issuer. The issuers of bonds in which the Fund invests may not be able to pay the bond income as promised or could fail to repay the capital amount.
• Investments may be made directly in hedge funds or, through specific investment vehicles into property, infrastructure and commodities. Returns from these investments are sensitive to various factors including interest and exchange rates, economic growth prospects and inflation, and the cost and availability of gearing (debt finance).
  
  

Further details of the risks associated with investing in the Fund can be found in the NURS Key Investor Information Document, copies of which are available at www.bailliegifford.com, or the Prospectus which is available by calling the ACD.

This communication does not constitute, and is not subject to the protections afforded to, independent research. Baillie Gifford and its staff may have dealt in the investments concerned. The views expressed are not statements of fact and should not be considered as advice or a recommendation to buy, sell or hold a particular investment.

Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA).

Baillie Gifford & Co Limited is authorised and regulated by the Financial Conduct Authority. Baillie Gifford & Co Limited is an Authorised Corporate Director of OEICs.

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