Why has Baillie Gifford been so Volatile

Redlander

My wife has a Scottish Widows pension that is invested in "Scottish Widows Baillie Gifford Managed". I noticed that it seems much more volatile than some other funds such as my Santander Atlas Portfolio 4 and Vanguard Life Stategy 60. In particular it reached a conspicuous peak in about August 2021, then plunged down to the level of the other funds.
Just as a matter of interest, I'm wondering what it is about the make-up of the Baillie Gifford fund that has made it so volatile. Has anyone any ideas?

TiVo_Lad

This might be helpful. The SW FactSheet

https://documents.feprecisionplus.com/factsheet/swpoc/fs/TI50_SCJ.pdf

dunstonh

. I noticed that it seems much more volatile than some other funds such as my Santander Atlas Portfolio 4 and Vanguard Life Stategy 60.

It would be as it is higher risk than both of those.

In particular it reached a conspicuous peak in about August 2021, then plunged down to the level of the other funds.

That is understandable as that is the point tech stocks started to crash.

Just as a matter of interest, I'm wondering what it is about the make-up of the Baillie Gifford fund that has made it so volatile. Has anyone any ideas?

Primarily down to tech.    Tech is high growth, high risk , high loss and high volatility.   We are effectively going through the second dot.com bust

Linton

Baillie Gifford funds tend to specialise in high risk/high return investments.  You dont buy them for a quiet life. For example I believe they were the largest corporate investor in Tesla before it went on the stock market.

Redlander

Thank you everyone. I'm not sure I remember any advisor telling us this when the pension was set up.

eskbanker

Redlander said:

Thank you everyone. I'm not sure I remember any advisor telling us this when the pension was set up.

What advice was involved - was it just one-off transactional assistance or is there any ongoing provision, and from whom?  What documentation is there relating to it?

bostonerimus

Your BG fund probably invests in volatile high risk/high return high loss stocks. So it will have done well in the bull market and poorly more recently with markets depressed. You need to have a portfolio that is aligned with your goals and if you have a long time before retirement BG might be good, but it's also a cautionary example as jumping on a popular fund in good times might not be as good in bad times and you have to know what you'll do in both circumstances. It is now that actively managed funds should be proving their worth, I won’t be holding my breath for most of them.

Reaper

Redlander said:

Thank you everyone. I'm not sure I remember any advisor telling us this when the pension was set up.

You say your other funds are more conservative, if so it probably makes sense to have this one as part of a mix, assuming the mix matches your risk profile

P1Fanatic

When did your wife set it up and choose the fund? Is the entire pension in the BG fund or just a certain %? I have a Scottish Widows pension through my work and the default is all very mid range between cautious and risky. I think our default fund was Pens Portfolio Two but you can of course transfer any % or future contribution only to any other fund that SW offer.

P1Fanatic

And presumably its this fund:

https://www.trustnet.com/factsheets/P/ti50/sw-baillie-gifford-managed-pension/

NoviceInvestor1

Many BG funds buy a load of speculative junk and hope some of it goes on to be the next Tesla. 

Unfortunately much of it hasn't, with many stocks they bought dropping 50/60/70/even 90+%.

I've always found BG Managed a really bizarre offering. Some bondy/fixed interest type stuff along with a load of high PE loss making moonshots.