Page 34 - DIY Investor Magazine | Issue 29

KEYSTONE POSITIVE CHANGE: PROFIT & PURPOSE
Baillie Gifford’s newest investment trust, Keystone Positive Change, got off to a volatile start but its managers have their eyes fixed firmly on the long term; I took an initial stake in Keystone when it proposed the manager change in late 2020.
I added a little more before the decision was ratified, then topped up again when the share price sank in March when tech/growth fell from favour; my position is about where I’d like to be, movements of the share price have left me a few per cent below water, but now that Keystone has published its first results under Baillie Gifford’s, let’s see how things are shaping up.
KEY STATS FOR KEYSTONE POSITIVE CHANGE
NB the recent manager change makes the 10-year NAV return pretty meaningless:
• Founded: 1954
• Ticker: KPC (KIT pre-11 Feb 2021)
• Managers: Kate Fox and Lee Qian from 11 Feb 2021
• Management firm: Baillie Gifford
(Invesco to 10 Feb 2021)
• Share price: 310p
• Market cap: £192m
• Discount to NAV: 1.3%
• Costs: 0.55% OCF and 1.1% KID
• 10-year NAV total return: +101%
• Benchmark: MSCI All Countries World Index
• AIC sector: Global
• Current dividend and yield: 11.2p and 3.6%, but will be
significantly lower and possibly zero from 2022 onwards
• Links: Website – AIC page – Kepler Feb-21 review – Retail
webinar
Price data as of 30 Apr 2021
WHAT IS POSITIVE CHANGE?
The Positive Change team of seven led by Kate Fox looks
for high-quality growth companies, similar to Baillie Gifford’s other trusts and funds; companies should also make a positive impact on society and/or the environment. The ‘positive impact’ net is cast wide and Fox says less obvious ideas are often
her personal favourites; the team also runs the £2.4bn Baillie Gifford Positive Change open-ended fund.
INVESTING STYLE
A concentrated, low-turnover approach, KPC aims for 30-60 companies and had 33 as of March 2021 with turnover of 20% a year; it aims to beat the MSCI All Countries World Index by 2% per annum over rolling five-year periods.
The fund and the trust look very similar with the same top 10 holdings; differences are that Keystone can employ gearing, can buy slightly smaller as well as private companies. The open-ended fund has done spectacularly well since launch in 2017, sucking in £2.4bn and up 33% p.a. vs its 11.1% benchmark.
The portfolio is split into these four categories: Social Inclusion and Education, Environment and Resource Needs, Healthcare and Quality of Life and Base of the Pyramid.
The idea generation process is organic with no sector restraints; companies need to meet both aims of high-quality growth and positive impact to be considered, with ongoing monitoring and engagement.
‘COMPANIES NEED TO MEET BOTH AIMS OF HIGH-QUALITY GROWTH AND POSITIVE IMPACT TO BE CONSIDERED’
DIY Investor Magazine | Jun 2021 34