Episoder
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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: Pinduoduo
South-east Asia’s rising export stars
Jio Financial Services
Natura
PDD Holdings
Pinduoduo
Reliance Industries
Temu
TSMC
Gabriel Garcia Marquez: Until August
Timecodes:
00:00 Introduction
01:45 Joining the Emerging Markets Team
03:15 A ‘terrifying’ baptism of fire
05:00 Emerging markets’ ‘dirty little secret’
05:45 Qualifying for emerging markets status
06:45 Higher-calibre companies
08:00 Macroeconomic resilience
09:30 US-China tensions and Russia’s invasion of Ukraine
12:00 Investing in China
13:45 PDD Holding’s Pinduoduo and Temu
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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 trial
Novo Nordisk cardiovascular trial press release
Novo Nordisk kidney trial press release
Novo Nordisk Foundation
Wegovy
World Health Organization obesity factsheet
Hitting Against the Spin
Timecodes:
00:00 Introduction
1:40 What are GLP-1s?
4:00 Scientific breakthrough
5:05 Obesity: a disease, not a choice
6:45 Novo Nordisk’s drug, Wegovy
08:10 Prescription costs
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Manglende episoder?
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What distinguishes companies that will thrive from those that will perish? In this episode, we explore three traits that mark out the companies set to surge ahead from those more likely to struggle:
1. They solve real-world problems
2. They are financially strong and disciplined
3. They are highly adaptable
Baillie Gifford partner Tim Garratt discusses these characteristics, gives examples of companies that exhibit them and explains why this feels like a once-in-a-generation opportunity to be a long-term growth investor.
Background
Tim Garratt is an investment specialist, overseeing the institutional clients who invest in our Long Term Global Growth strategy and leading our broader client specialist network.
He recently co-authored the paper Why growth, why now?, which reaffirms our beliefs about how growth investing can generate attractive returns.
In this episode of Short Briefings on Long Term Thinking, he discusses how interest rate rises, restricted amounts of capital and geopolitical tensions are causing a stock market shake-out. And he explains why this plays to the advantage of patient investors who focus on the fundamentals when picking growth stocks.
Garratt gives examples of how companies, including Netflix, Roblox, Shopify and Amazon, fulfil the criteria we seek. And he explains how Baillie Gifford itself is adapting to the times, exploring the use of machine learning and other tools to hone our investment process.
Resources:
Why growth, why now?
We’re all climate hypocrites now
See & Spray
Netflix engagement report
Timecodes:
00:00 Introduction
1:30 From abundance to limitation
03:45 Implications for investors
05:20 Real world problems: supply chains
07:30 Deere and hi-tech farming
09:00 Financial strength and discipline
09:50 Netflix and pricing power
12:00 Keeping watch on margins
14:15 China’s electric vehicle makers
16:15 Adaptability and new business models
16:50 Roblox adds AI
19:30 Microsoft, Amazon and environmental costs
21:45 Sea and the importance of culture
23:00 How Baillie Gifford is adapting
25:05 ‘Why now?’ for growth investing
26:55 Book choice
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Show notes
Amazon and DoorDash take different approaches to bridging the physical and digital worlds. Amazon has built an extensive infrastructure of warehouses, logistics networks and data centres to directly control its operations. DoorDash instead relies on partnerships with restaurants and stores for deliveries, limiting its capital investment. In this podcast, Baillie Gifford investment manager Kirsty Gibson analyses the advantages of each model and how both approaches can pose a disruptive challenge to more traditional businesses.
Amazon and DoorDash exemplify two distinct approaches to rooting a business in both the physical and digital worlds. Amazon has done so by investing deeply in physical infrastructure, including its vast logistics operations and data centres. DoorDash, by contrast, has focused on partnering with others to offer meal and grocery deliveries. Baillie Gifford investment manager Kirsty Gibson explores the merits of each approach and discusses how the two companies and others like them can pose a disruptive challenge.
Background
Kirsty Gibson is an investment manager in Baillie Gifford’s US Equity Growth Team and is joint manager of the American Fund and US Growth Trust.
In this episode of Short Briefings on Long Term Thinking, she explores how a growing number of companies are posing a challenge to incumbents by innovating in both the digital and physical realms. The podcast draws on an interview she gave as part of Baillie Gifford’s Disruption Week 2023 event.
In addition to discussing how Amazon and DoorDash put this into practice, Gibson also discusses the chemicals maker Solugen, self-driving lorries pioneer Aurora and electric car maker Rivian, among others.
Resources:
Where software meets steel
Disruption Week 2023 articles and videos
Growth waves: supporting companies and spotting opportunities
Past podcasts
Timecodes:
00:00 Introduction
1:30 Historical background
4:21 Capital-intensive and capital-light approaches
5:31 How Amazon blends its physical and digital operations
8:33 Rivian’s electric pickup trucks
9:57 Solugen: making chemicals with software
13:39 DoorDash’s capital-light approach
15:45 DashMart distribution centres
17:28 Aurora’s autonomous trucking business model
20:30 Reinvesting in Meta
23:25 Investing with conviction
24:18 Ginkgo Bioworks’ potential
Follow us via:
Twitter
LinkedIn
Companies mentioned include:
Alphabet
Amazon
Aurora Innovation
DoorDash
Ginkgo Bioworks
Meta
Netflix
Rivian
Solugen
Tesla
Twilio
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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.
Background
Ben 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 transition
Ben Durrant LinkedIn page
How Asia Works
How the World Really Works
Past podcasts
Timecodes:
00:00 Introduction
01:30 China’s success as a low-cost exporter
03:15 Land reform’s role
04:00 Good quality, low-cost labour
05:45 South-east Asian countries’ advantage
07:15 Vietnam’s growth opportunity
09:30 Vin Hoan: exporting catfish
11:45 Sourcing local insights
13:30 Indonesia’s move up the value chain
16:15 Clusters of expertise in Malaysia
18:00 Looking beyond tourism in Thailand
20:15 Moving up the value chain
22:15 The attraction of growth investing in southeast Asian
23:15 Paying attention to macroeconomics
24:30 Book recommendation
Follow us via:
Twitter
LinkedIn
Companies mentioned include:
FPT
Hyundai
Samsung Electronics
Vinh Hoan
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Is the time ripe for Japanese growth stocks? Donald Farquharson is Baillie Gifford’s head of Japanese equities and knows the market better than most. In the latest episode of Short Briefings on Long Term Thinking he draws on a recent visit to the country to explain why conditions seem favourable for a cohort of domestic companies with long-term mindsets.
Background
There’s a sense of renewed confidence and enthusiasm in the air in Japan. The country is home to the world’s second-largest market for equities after the US, but it doesn’t get a corresponding degree of attention from international investors.
The reason is partly because of the nation’s past weak economic performance. But a recovery is underway, and critically, many of its growth stocks have strong balance sheets, big ambitions and a positive story to tell.
In this episode, Baillie Gifford partner Donald Farquharson draws on his experience of investing in Japan since 1990 to explain why he’s particularly optimistic about the opportunities ahead for a select group of companies. They include the medical equipment maker Olympus, the car components manufacturer DENSO and the takeover advisory service Nihon M&A Center.
He also shares why he thinks some misunderstand Japan and why it’s no coincidence that many of the companies he backs are founder-run.
Resources:
Discovering the unsung superstars of Japanese technology
From Yahoo! to Z Holdings: the evolution of an online pioneer
Japan: the small businesses with big opportunities
Investing in Japan: distance lends perspective
Donald Farquharson’s LinkedIn page
Aiming High: Masayoshi Son, Softbank Group and Disrupting Silicon Valley
Past podcasts
Timecodes:
00.00 Introduction
01:40 Investing in Japan in the 1990s
03:00 ‘Undiscovered’ Japan
03:55 How banks and other businesses changed
05:30 A sustainable recovery?
06:45 An exciting time for growth companies
07:45 Strong balance sheets
08:15 Olympus and endoscopes
09:45 Diversity on the board
11:00 Nihon M&A Center and company takeovers
12:50 DENSO, a major supplier to Toyota and others
14:30 Toyota City, home to one million people
15:35 Competition for car batteries
16:30 Baillie Gifford’s advantage in Japan
17:45 Looking beyond the headlines
18:20 Book recommendation: Masayoshi Son and Aiming High
19:45 Investing in founder-led firms
Follow us via:
Twitter
LinkedIn
Email
Companies mentioned include:
DENSO
Koganei Country Club
Nihon M&S Center
Olympus
Panasonic
ROHM Semiconductor
Softbank
Toyota
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What counts as a growth stock is ever-changing. Mark Urquhart shares lessons from 27 years of investing to explain how he decides what to buy and how long to hold as he continues his hunt for outsized returns.
Background:
In 1996, our largest investments included oil and gas companies and high street banks. These days, our biggest holdings specialise in computer chips, ecommerce and biotech. We still pursue long-term growth – companies we believe will reach their potential given time. But we find it in different places.
In this episode, partner Mark Urquhart explains how he tries to identify companies that can grow for a decade or longer, allowing their sales, profits and share prices to compound along the way. He discusses the changing nature of the businesses that qualify and what gives him the confidence to back maverick founders. Other topics he covers in conversation with managing editor Malcolm Borthwick include lessons from the pandemic and the growth companies that most excite him today.
Resources:
The changing face of growth
Four cardinal questions for growth investors
Mark Urquhart’s LinkedIn page
1599: A Year in the Life of William Shakespeare
Past podcasts
Timecodes:
00.00 Introduction
1:20 Joining Baillie Gifford in the pre-Google era
03:45 An evolving attitude to growth companies
05:20 Looking for stronger compound growth
06:35 Investing in Microsoft
08:00 The quest for companies like Hermès
09:55 Learning to be open-minded in Japan
12:10 The importance of mavericks
13:40 How Tesla hit its targets
14:40 Investing in times of crisis
17:35 What the Covid pandemic teaches growth investors
23:05 Today’s most exciting growth companies
25:15 Book recommendation
Follow us via:
Twitter
LinkedIn
Email
Companies mentioned include:
Alphabet (Google)
Apple
ASML
Dexcom
Don Quijote
Hermès
MercadoLibre
Microsoft
Netflix
Peloton
SpaceX
Tesla
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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 investors
Let’s talk about actual investing
Baillie Gifford’s investment beliefs
The Premonition by Michael Lewis
The Economics of Fund Management by Ed Moisson
The Golfer’s Journal
Timecodes:
0:00 Introduction
1:30 What is Actual investing?
3:30 Finding great companies
4:20 Investing with autonomy and conviction
6:10 Growth investing
8:00 Companies harnessing technology
9:10 The next decade of growth
12:00 Health innovation
14:45 Interest rates and inflation
19:00 Stress testing portfolios
21:15 Guarding against group think
22:30 Book recommendations
Follow us via:
Twitter
LinkedIn
Email
Companies mentioned include:
Amazon
Apple
ASML
Moderna
Netflix
Samsung
TSMC
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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 Company
Order a copy of the SAINTS: 150 Years book
SAINTS Manager Insights video, April 2023
The SAINTS approach webinar video, March 2023
Shoemaker by Reebok founder Joe Foster
My Years at Volkswagen by Carl Hahn
Baillie Gifford’s Trust magazine
Follow us via:
Twitter
LinkedIn
Email
Companies mentioned include:
Analog Devices
Atlas Copco
Cognex
L'Oréal
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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 change
Deep Transitions Futures project
Previous Short Briefings on Long Term Thinking episodes
Follow us via:
Twitter
LinkedIn
Companies mentioned include:
Beyond Meat
Deere
Northvolt
Tesla
Umicore
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Meet the lesser-known niche players thriving in the shadow of the country’s big brands
Think of Japanese companies and chances are giants such as Sony, Hitachi and Mitsubishi come to mind. You probably don't think of Shima Seiki - a maker of automated knitting machines, Descente, which owns licences to use brands such as Le Coq Sportif and Umbro, or Shoei, a maker of handmade motorcycle helmets. But these kinds of companies are the beating heart of its economy. Japan’s three and a half million small and medium-sized businesses (SMEs) employ about seven in 10 private sector workers. These firms are sometimes overlooked by investors in Japan, but not by Praveen Kumar, manager of Baillie Gifford Shin Nippon, who explains why they provide ample opportunities for growth investors.
Praveen Kumar is manager of the Baillie Gifford Shin Nippon and Baillie Gifford Japan Trust. You can read more about his and his colleagues’ thoughts about the positive outlook for Japan’s most inventive and disruptive companies at our Japan Forum: Steering through rough seas. For the thoughts of his colleague Donald Farquharson, Head of Japanese Equities, on the country’s post-Covid return to normality, go to Investing in Japan: Distance lends perspective. And to find out more about how Praveen and his team get to hear about exciting SMEs, watch Investing in Japan: Insights with our Japan researchers.
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As many question the future of growth investing, the American Fund’s Dave Bujnowski explores the new engines powering progress.
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Apps and online courses have upended the economics of education, making learning more accessible, fun and relevant. Positive Change’s Thaiha Nguyen explains.
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For Peter Singlehurst, head of the Private Companies Team, the difference between investing in a private company and a public company is that private companies choose their shareholders. So, why choose Baillie Gifford?
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