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Baillie Gifford launches sustainable investment fund

Baillie Gifford launches sustainable investment fund

Edinburgh-based fund house Baillie Gifford is to launch a fund that invests in a sustainable and ethical way.

The mandate will exclude stocks in certain industries such as tobacco, alcohol and armaments.

The investments must also adhere to the principles of the UN Global Compact covering areas such as human rights, labour, the environment, and anti-corruption.

The Global Compact is a non-binding pact to encourage businesses worldwide to adopt sustainable and socially responsible policies.

The fund will have £50m of assets at launch with the capital coming from existing Baillie Gifford clients.

The Baillie Gifford Responsible Global Equity Income fund will be managed by a team headed by Toby Ross and James Dow, which also manages the Baillie Gifford Global Income Growth fund.

Mr Ross and Mr Dow are also the managers of the The Scottish American Investment Company.

The fund will have an annual charge of 0.63 per cent at launch.

Mr Ross said: "Investors have often had to make a choice between investing for income and investing for the greater good.

"This fund bridges this gap for those seeking a high and rising income from responsible equity investments.

"By hard wiring both negative exclusions and the broader consideration of the UN Global Compact into our stock selection process, and applying it to the best investment opportunities from around the world, we are confident we will be able to invest both sustainably and responsibly on behalf of our clients."

Ben Willis, head of portfolio management at Chase De Vere, said: "We like Baillie Gifford. They are experienced long-term growth investors.

"While they aren’t known as ethical or sustainable managers, the launch of this fund has come from segregated mandates they run from charities and endowments and they are taking it very seriously.

"There are not many ethical funds which pay a sustainable dividend and so, with the credentials of Baillie Gifford and the focus they’re putting on sustainable criteria, it is a fund which could be considered for ethical clients."

david.thorpe@ft.com