baillie gifford global discovert B acc poor performance

Mistermeaner

Hi bought a chunk of the above fund (5K) in 2021 and its tanked pretty bad dropping 60% in value since then. I am OK with this as its a small part of a much larger portfolio and was purchased as a gamble more than anything. I am not intending to sell and crystallise the loss as i have no immediate need for the money

Interested if anyone else has this fund, why they bought it and if they will hold it as well

Not after investment advice but interested to understand why it has done so badly given it is essentially a small gap fund. My other small gap gamble bought at the same time (vanguard global small cap index) has done +20% in the same period

FWIW VLS100 and and UBS S&P 500 trackers both did +60% in the same period.

Luckily the bulk of my investments are in passive global trackers

Eyeful

1. What is a small gap fund?
2. Are you sure you have Ballie Gifford Global discovert B acc Fund?

eskbanker

Mistermeaner said:

Not after investment advice but interested to understand why it has done so badly given it is essentially a small gap fund. My other small gap gamble bought at the same time (vanguard global small cap index) has done +20% in the same period

That's very much an apples v oranges comparison though, despite them both being small cap oriented - the Vanguard fund is a highly diversified passive tracker with over 4,000 holdings, whereas the BG fund is an actively managed fund concentrated on a mere 77 equities.

Linton

Mistermeaner said:

Hi bought a chunk of the above fund (5K) in 2021 and its tanked pretty bad dropping 60% in value since then. I am OK with this as its a small part of a much larger portfolio and was purchased as a gamble more than anything. I am not intending to sell and crystallise the loss as i have no immediate need for the money

Interested if anyone else has this fund, why they bought it and if they will hold it as well

Not after investment advice but interested to understand why it has done so badly given it is essentially a small gap fund. My other small gap gamble bought at the same time (vanguard global small cap index) has done +20% in the same period

FWIW VLS100 and and UBS S&P 500 trackers both did +60% in the same period.

Luckily the bulk of my investments are in passive global trackers

Baillie Gifford funds often provide high risk/ high return behaviour by specialising in niche areas.  In this case, Baillie Gifford Global Discovery, it happens to be mainly US (67%) and UK (13%) Small/medium Companies (Small Cap not Gap) with a particular focus at the moment in pharmaceuticals.  In the past 5 years it more than  doubled in value and subsequently more than halved I would guess due to  COVID.  You happen to have bought your investments near the top.

The reason why your trackers perfrmed much better is that much of the global growth in recent years has come from the US megaTechs where BG Global Discovery would have missed out completely.

So if it had been a substantial part of your portfolio it would suggest 2 rookie mistakes:
1) Lack of diversification
2) Basing investment choice on recent perfiormance data

I would not hold it all except perhaps for a bit of fun once the bulk of assets were allocated to meet objectives.  Though really I have better uses for my money.

Hoenir

Tail end of Tesla's meteoric rise. Tesla finally floated in December 2021. Slightly before and thereafter BG started to sell down it's stake. At the peak BG across all it's funds owned 8% of Tesla.

Many people like your good self probably jumped on the fund bandwagon due to it's impressive historic performance. As good as any fund manager is. Backing the right horses comes with a lot of luck and good fortune. Identifying another Tesla is statistically remote. Given the number of technological starts up's. The vast majority of which fail to reach a high level of commercial viability. 

dunstonh

FWIW VLS100 and and UBS S&P 500 trackers both did +60% in the same period.

VLS100 is not a tracker.  S&P500 has been the major area of gain in this cycle.

BG invests in a way that has been rubbish of late.  It happens.  (just as it did with the S&P500 in the previous cycle)

Mistermeaner

thanks all. Yes it should read small CAP no idea how that autocorrected

Thankfully it is less than 1% of my overall portfolio and a random gut punt - one that hasn't worked out. I'll hold it anyway as who knows what the future may bring.

Just emphasises a couple of lessons; past performance does not equal future performance. Understand what you are investing in. Diversity is king

Always learning

Beddie

Mistermeaner said:

thanks all. Yes it should read small CAP no idea how that autocorrected

Thankfully it is less than 1% of my overall portfolio and a random gut punt - one that hasn't worked out. I'll hold it anyway as who knows what the future may bring.

Just emphasises a couple of lessons; past performance does not equal future performance. Understand what you are investing in. Diversity is king

Always learning

I also bought a relatively small amount of that fund, with "perfect" timing near the top of its price and lost over 50%. Like you, keeping it to see what happens, though the sensible option is to sell. Ah well. Always learning here too.

Camster

I was in the same position, but decided to cut my losses and sold my holding in October and put the proceeds in the L&G International Index find I.

I checked the performance of the L&G fund today and it has risen by almost 24% over the last year, while the BG fund is only up by 4.5%, over the same period. I think it's unlikely that this level of increase will continue, but if I'd have sold earlier, I would at least be some way towards recovering from the losses.

I will be sticking to passive funds in the future. 

Chickereeeee

I bought before the big rise, and sold most early on in the subsequent fall. 

I plot all my holdings on Trustnet, and it is interesting to see that fund zoom upwards in a huge peak, then drop down to be back as part of the herd of my other investments. Reversion to the mean, I guess.

dunstonh

I will be sticking to passive funds in the future. 

I don't disagree, but it is worth remembering that market cap index funds have benefitted by being heavy in US equities during a period when US equities have been the top performer.        In a cycle where global equity (exc US) outperforms US equity, then trackers will take some pain.    Historically, cycles tend to alternate between global and US.