Baillie Gifford is branching out in the Pacific with the introduction of the developed Asia Pacific fund.
The fund is an open-ended investment company and is aimed at institutional investors such as pension fund trustees as well as private investors who are looking to add a medium risk investment to an existing portfolio.
The fund will invest in four of the most developed countries on the Pacific rim, which are Australia, New Zealand, Singapore and Hong Kong. Baillie Gifford will target medium to large cap companies in these countries that the investment team thinks have good growth potential.
Developed Asia Pacific will be managed by Baillie Giffords new emerging markets investment department, which was previously confined to looking at countries in the Pacific rim. Heading the team will be Gerald Smith, who joined Baillie Gifford in 1987 and who has been a partner at the company since 1998. He also manages the Baillie Gifford Pacific fund, which to avoid duplication will no longer invest in the same countries as the developed Asia Pacific fund.
Many Pacific rim countries have been experiencing sluggish growth over the past few years. One reason for this has been the poor performance of the Japanese economy, which has been hit by political instability, bad bank debt, a looming trade war with China and a lack of a coherent economic policy. Although this fund does not invest in Japan, the countries around it have economies that are tightly tied to its economy, so that anything that happens there can ripple outward.
According to Standard & Poors the Baillie Gifford Pacific fund is ranked 3 out of 64 funds, based on £1,000 invested on a bid-to-bid basis with next income reinvested over three years to June 25, 2001.