Short Briefings on Long Term Thinking - Baillie Gifford

Emerging markets have sometimes promised more than they have delivered, but circumstances may be tipping in growth investors’ favour. Will Sutcliffe, head of our Emerging Markets Team, explains why it’s an opportune time to invest in the asset class. Background: Will Sutcliffe is the head of Baillie Gifford’s Emerging Markets Team and co-manager of our Emerging Markets Leading Companies Fund. In this episode of Short Briefings on Long Term Thinking, he brings his 23 years of experience in the field to explain what makes the specialism different from other types of growth investing. He makes the case that finding exceptional growth companies at attractive valuations is only part of the equation. Investors must be mindful of the broader macroeconomic environment, he explains, to avoid getting caught out by currency swings or spiralling debt costs. This leads him to conclude that recent resilience in emerging market economies could point to a favourable outlook for the asset class’s growth stocks. All this only matters to our portfolios if there are exceptional businesses to invest in, and Sutcliffe argues that the emerging markets are home to an increasing number of world-class companies. They range from the Taiwanese chip maker TSMC to the energy, retail and telecoms conglomerate Reliance Industries. Resources: Emerging markets: why bother?Stock story: PinduoduoSouth-east Asia’s rising export starsJio Financial ServicesNaturaPDD HoldingsPinduoduoReliance IndustriesTemuTSMCGabriel Garcia Marquez: Until August Timecodes:00:00    Introduction01:45    Joining the Emerging Markets Team03:15    A ‘terrifying’ baptism of fire05:00    Emerging markets’ ‘dirty little secret’05:45    Qualifying for emerging markets status06:45    Higher-calibre companies08:00    Macroeconomic resilience09:30    US-China tensions and Russia’s invasion of Ukraine12:00    Investing in China13:45    PDD Holding’s Pinduoduo and Temu

A new medicine that can help patients lose 15 per cent of their body weight could have far-reaching consequences for healthcare. Wegovy mimics a hormone the gut releases, reducing appetite and slowing digestion to delay hunger’s return. Research is also underway into other potential health benefits. In this podcast, Baillie Gifford investment manager Ross Mathison discusses its maker, the Danish pharmaceuticals manufacturer Novo Nordisk, which became Europe’s most valuable company in 2023. Background:Ross Mathison is an investment manager in our Global Income Growth Team, co-manager of our Global Income Growth Fund and deputy manager of the Scottish American Investment Company (SAINTS). In this episode of Short Briefings on Long Term Thinking, he discusses how medicines that mimic the glucagon-like peptide-1 (GLP-1) hormone could help tackle the growing problem of weight gain. Forecasts suggest that by 2035, more than half the world’s population will either be overweight or obese. That’s likely to lead to more people suffering associated diseases, putting health budgets under further strain. Novo Nordisk initially researched GLP-1s as a diabetes treatment. The company is the world’s biggest insulin producer, but it’s the release of its weight-loss drug Wegovy that’s transformed its growth prospects. News that medical trials suggest that the therapy could also reduce the likelihood of heart attacks, strokes and other cardiovascular threats among some patients has driven further investor interest. Mathison explains that there could be further health benefits beyond this, how even more effective treatments could follow and why Novo Nordisk’s manufacturing edge and connection to the world’s biggest charitable foundation bode well for its future. Resources:New England Journal of Medicine: Semaglutide trialNovo Nordisk cardiovascular trial press releaseNovo Nordisk kidney trial press releaseNovo Nordisk FoundationWegovyWorld Health Organization obesity factsheetHitting Against the Spin Timecodes:00:00    Introduction1:40      What are GLP-1s?4:00      Scientific breakthrough5:05      Obesity: a disease, not a choice6:45      Novo Nordisk’s drug, Wegovy08:10    Prescription costs

Discover the three characteristics that define great growth companies: solving real-world problems, financial strength and discipline, and high adaptability. Baillie Gifford partner Tim Garratt explains why these traits are crucial for long-term growth investing and shares examples of companies like Netflix and Amazon that exhibit them. He also discusses the importance of adaptability in business during challenging times, the shift from abundance to limitations in capital supply and natural resources, and the use of automation and AI to address supply chain challenges.

This podcast explores Amazon and DoorDash's different approaches to bridging the physical and digital worlds. Amazon invests in its own extensive infrastructure while DoorDash relies on partnerships. The podcast discusses the advantages of each model and how they disrupt traditional businesses.

China became known as the world’s factory thanks to it offering companies a way to manufacture all kinds of goods at a high quality and relatively low cost. But in recent years, south-east Asian nations, including Vietnam and Indonesia, have begun challenging it for that status. Baillie Gifford investment manager Ben Durrant recently returned from a tour of the region. He discusses some of the long-term growth opportunities he unearthed on his trip. BackgroundBen Durrant invests on behalf of the Pacific Horizon Investment Trust, the Pacific Fund, and our Emerging Markets Equity Team. In this latest episode of Short Briefings on Long Term Thinking, he explores the factors that led China to become the world’s leading exporter and how its move up the value chain is now creating opportunities for other south-east Asian countries to grasp. Durrant reviews some of his most memorable encounters in Vietnam, Indonesia, Malaysia and Thailand and reveals which growth companies excited him the most. They include businesses using mined metals to make car batteries, banks serving populations with growing spending power and, perhaps surprisingly, one of the world’s leading catfish exporters.Resources: The Indonesian companies powering the green transitionBen Durrant LinkedIn pageHow Asia WorksHow the World Really WorksPast podcasts Timecodes:00:00        Introduction01:30      China’s success as a low-cost exporter03:15        Land reform’s role04:00        Good quality, low-cost labour05:45        South-east Asian countries’ advantage07:15        Vietnam’s growth opportunity09:30        Vin Hoan: exporting catfish11:45        Sourcing local insights13:30        Indonesia’s move up the value chain16:15        Clusters of expertise in Malaysia18:00        Looking beyond tourism in Thailand20:15        Moving up the value chain22:15        The attraction of growth investing in southeast Asian23:15        Paying attention to macroeconomics24:30        Book recommendation Follow us via:TwitterLinkedIn Companies mentioned include:FPTHyundaiSamsung ElectronicsVinh Hoan

Donald Farquharson, Baillie Gifford's head of Japanese equities, discusses why conditions seem favorable for a cohort of Japanese growth stocks. He highlights companies like Olympus, DENSO, and Nihon M&A Center. They also explore the history of Japan's economy, the importance of research and development in the automotive industry, misconceptions about Japan's market, and the investment strategies of Masayoshi Son.

The speaker shares their journey of joining Baillie Gifford and discusses the evolving investment strategy. They explore the growth and changes in Baillie Gifford since 1996. The importance of maverick individuals and lessons from financial crises are highlighted. They also discuss the book '1599' which provides historical insights.

Stuart Dunbar explains why a long-term investment approach suits the new types of growth companies that are emerging.Background:It’s been five years since Baillie Gifford launched its ‘actual investors’ campaign. It focuses on the firm’s long-term, active approach to growth.  In this episode, the effort’s mastermind Stuart Dunbar joins Malcolm Borthwick to take stock and explain why actual investing is more relevant than ever. As he explains, capital-intensive companies are seeking to transform healthcare, transport and entertainment, among other industries, and they need patient, supportive shareholders to fulfil their potential and deliver strong returns.  Resources:Actual investorsLet’s talk about actual investingBaillie Gifford’s investment beliefsThe Premonition by Michael LewisThe Economics of Fund Management by Ed MoissonThe Golfer’s Journal Timecodes:0:00   Introduction1:30   What is Actual investing?3:30   Finding great companies4:20   Investing with autonomy and conviction6:10   Growth investing8:00   Companies harnessing technology9:10   The next decade of growth12:00   Health innovation14:45   Interest rates and inflation19:00   Stress testing portfolios21:15   Guarding against group think22:30   Book recommendationsFollow us via:TwitterLinkedInEmailCompanies mentioned include: AmazonAppleASMLModernaNetflixSamsungTSMC 

To mark the pioneering Trust’s anniversary, James Dow delves into SAINTS’ origins and explains how he helped reinvigorate it for a new age.Background:The Scottish American Investment Company (SAINTS) made its debut in 1873, introducing the first trust to prevent shareholders from facing ruin if a business they backed failed. This groundbreaking approach instilled confidence, paving the way for the public to invest in a vital US railway among other enticing overseas opportunities.Nearly 20 years ago, Baillie Gifford took over the Trust’s management. Joint manager James Dow helped revitalise SAINTS by focusing on exceptional income-driven global companies. As he tells podcast host Malcolm Borthwick, their activities range from making AI-enhanced factory cameras to creating some of the world’s most sought-after cosmetics.Resources:The Scottish American Investment Trust CompanyOrder a copy of the SAINTS: 150 Years bookSAINTS Manager Insights video, April 2023The SAINTS approach webinar video, March 2023Shoemaker by Reebok founder Joe FosterMy Years at Volkswagen by Carl HahnBaillie Gifford’s Trust magazineFollow us via:TwitterLinkedInEmailCompanies mentioned include:Analog DevicesAtlas CopcoCognexL'Oréal

Keystone Positive Change’s Kate Fox on thinking about the world in 2050 to spot opportunities today.Background:Kate’s conversation with Malcolm Borthwick covers her work with the Deep Transitions Futures project, coordinated by the University of Sussex and Utrecht University and supported by Baillie Gifford.The project aims to identify patterns and insights from past ‘deep transitions’, such as the Industrial Revolution, to inform and guide our approach to identifying solutions to present and future challenges. These include climate change, social inequality, and biodiversity loss. The initiative seeks to develop strategies for fostering radical innovation. It engages investors, policymakers and researchers, among other stakeholders, to promote a transformative investment philosophy and drive systemic change.Resources:The second deep transition: Johan Schot’s theory of radical changeDeep Transitions Futures projectPrevious Short Briefings on Long Term Thinking episodesFollow us via:TwitterLinkedInCompanies mentioned include:Beyond MeatDeereNorthvoltTeslaUmicore