Real income, time after time

All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk.

What does sustainability mean to you? Is it something that lasts a lifetime, or even generations? Or is the emphasis placed on protecting our planet’s valuable resources and the best interests of those who inhabit it? We believe these two concepts are delicately interlinked – that the best income payers of tomorrow will be companies that are adapting to changing expectations from regulators and consumers.

How do we think about income for the long term?

Our multi-asset income investors believe it is possible to achieve a high level of income which is resilient and sustainable over the long term. When investing our clients’ assets, from a financial perspective, we care about the monetary amount of income we deliver, now and for years to come. We can do this by focusing on long-term income, not short-term yield. And we seek to protect against the power of inflation over time. When we consider the investments we make from an Environmental, Social and Governance perspective, we ask ourselves a simple question: is this investment compatible with a sustainable economy?

To deliver a sustainable long-term income stream, we avoid setting a specific target or chasing a high current yield at the expense of future income. Instead, we aim to deliver the highest level of income we believe is sustainable while preserving the value of both income and capital in real terms over the long term. Future-proofing for resilience.

Experience tells us that thoughtful security selection underpins income resilience. When looking for income, we look to the future. Which investments are prepared for the challenges of tomorrow in the market and our society? That is in our DNA. We are long-term fundamental investors. To be successful, we need to consider societal shifts that are likely to unfold over the coming years and decades. And the global consensus for the need to mitigate climate change, and the increased focus regulators and consumers are placing on fair treatment of all stakeholders, belong firmly in that camp. We believe that forward-looking companies that are successfully adapting to these changes will continue to thrive in the future and provide a source of long-term resilient income for our clients.

Growth mindset and asset allocation flexibility

Tomorrow’s capital is the engine of tomorrow’s income, so we invest in assets which can provide growth as well as income. Our multi-asset income investors can invest in equities, other real assets such as infrastructure and property, and a broad range of fixed income asset classes. These diverse income assets have complementary characteristics and blending them using active asset allocation gives us the flexibility to adapt to changing economic conditions.

Real income, time after time

With a fantastically broad set of income-generating opportunities around the world, we believe we can deliver an income distribution to our clients that is attractive relative to prevailing market yields. Over time, we expect this income stream to grow to maintain its real value and, over shorter periods, we focus on minimising its volatility.

Our credentials in long-term security selection, multi-asset investment experience, and a singular focus on income mean Baillie Gifford is ideally placed to deliver a lifetime of resilient income. Real income, time after time.

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Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford & Co Limited is an Authorised Corporate Director of OEICs.