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Baillie Gifford - Funds Vs Investment Trusts

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  • StellaN
    StellaN Posts: 354 Forumite
    Fourth Anniversary 100 Posts
    Linton wrote: »
    I hold BG Japanese Smaller Companies, The IT equivalent is Shin Nippon. I have looked at BG American and SMT, but cannot see how they would fit into an broadly diversified portfolio. One would need extra funds to fill the gaps, but those extra funds would also duplicate all the investments in the BG ITs so using the ITs becomes pointless.

    I wonder whether you will prefer the ITs in the next crash. SMT dropped about 55% in the last one.

    For long term investors (not traders), I don’t really see an issue with the extra volatility with ITs. Also, as Bowlhead mentioned there are some differences between the IT and fund option ie. SMT and BG Long Term Global Growth.
  • jamei305
    jamei305 Posts: 635 Forumite
    Tenth Anniversary 500 Posts Name Dropper
    bowlhead99 wrote: »
    To the original question: I would simply say there is no point in generalising that a fund house is good or bad, or that an IT or OEIC vehicle is conceptually better. Look at the individual product level and compare it to rivals from the same fund manager or a different fund manager ; evaluate each product on its merits.

    True there is probably no point in generalising, but surely there are at least some differences between fund houses in both the way they manage their funds and in the type of fund they chose to manage.

    It follows that it's not unreasonable to prefer certain fund houses. This doesn't mean choosing funds based on the fund house, but perhaps choosing funds based on some other set of criteria and discovering that certain fund houses seem to have funds satisfying those criteria more often than others.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    jamei305 wrote: »
    True there is probably no point in generalising, but surely there are at least some differences between fund houses in both the way they manage their funds and in the type of fund they chose to manage.

    It follows that it's not unreasonable to prefer certain fund houses. This doesn't mean choosing funds based on the fund house, but perhaps choosing funds based on some other set of criteria and discovering that certain fund houses seem to have funds satisfying those criteria more often than others.

    Yes, many fund houses have a specialism or a style which you might find attractive or unattractive and if you are looking for a certain type of attitude to exposure you might find one fund house's name coming up more frequently than others. BG seem to know what they are doing in several areas.

    But they have 35-40 different fund products and 'do you prefer their funds or investment trusts?' is something that I can't really answer. It's not like I am using 15+ products from them and leaning slightly one way or the other between ITs vs funds, nor I am using 9 of their ITs having rejected all 30 funds, or vice versa. Find what you want to do and then find a product that does it. It won't follow that you will definitely end up using a BG product at all, or a BG fund, or a BG IT. It depends on what you are trying to achieve and your personal preferences.

    Linton and I both use a mixture of ITs and funds in our portfolios, depending on what seems to be a decent tool for the particular job. It turns out that Linton uses a BG fund in one of his portfolios while I use a couple of BG ITs in mine.

    Funds and ITs have their own structural advantages and disadvantages. If the assets you're looking to hold don't necessarily play to one of those sets of advantages or disadvantages, it doesn't really matter what type of collective investment vehicle you are using. If the fund manager only offers a product through one or other vehicle type (e.g. the mixed asset funds, bond funds, sustainability funds etc are not available as ITs), that might make your decision for you. Or some non-manager-specific factor might be in play (e.g. platform fee structure) which causes you to lean one way or another.
  • Linton
    Linton Posts: 18,185 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    StellaN wrote: »
    For long term investors (not traders), I don’t really see an issue with the extra volatility with ITs. Also, as Bowlhead mentioned there are some differences between the IT and fund option ie. SMT and BG Long Term Global Growth.


    It depends on your circumstances. As I am retired and a long term de-cumulator, volatility could be an issue. My judgement is that it is worth sacrificing un-needed and probably less certain return to constrain it.


    The other factor of differences between the ITs and funds is also very important. My observation is that the funds seem to be more broadly based.



    Sadly "long term" is quickly getting shorter :(.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    Linton wrote: »


    Sadly "long term" is quickly getting shorter :(.

    If you fail to fully de-cumulate your BG funds before you run out of time, feel free to leave them to me :beer:
  • badger09
    badger09 Posts: 11,615 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Linton wrote: »



    Sadly "long term" is quickly getting shorter :(.


    Sounds like its time to dust off that bucket list and start working your way through it;) Doing so is helping me to 'decumulate' with remarkable ease:p
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