Baillie Gifford American co-fund manager Peter Cawston says the industry is obsessed with short-term performance and consistently ignores sustained long-term growth.Cawston says the average US mutual fund has an annual stock turnover of 100 per cent and likens it to a form of betting. He favours a longer-term approach in his 47-stock high-conviction portfolio and says the fund’s turnover was just 13 per cent in 2005. He says the fund’s philosophy is to stick with firms that are easy to understand and cites Google as an example of a stock that has diversified into too many areas. He says the fund is instinctively underweight in technology because it is a complicated sector and he believes that while the short-term outlook for the US economy is not great, its long-term potential is very strong. Two recent picks that have outperformed are oil services firm Schlumberger and billboard advertising group Lamar. He believes the fund’s ability to outperform the market has been helped by being located in Edinburgh and says: “It allows us to ignore the background market noise in London.” The group launched its core strategy in 2002 to focus on the UK, European and US markets. Baillie Gifford head of UK equities and chief of investment staff Charles Plowden believes Baillie Gifford’s recent growth and success is due to it remaining a strictly independent 29-partner business with low fund manager turnover. He says: “In the City, the average fund manager tenure is less than three years. At Baillie Gifford, it is 10 years.