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Buy into quality at depressed valuations via Baillie Gifford European Growth

Baillie Gifford European Growth's new managers target companies they think should deliver superior returns
Buy into quality at depressed valuations via Baillie Gifford European Growth

Europe may not seem like an obvious area to add money to as it includes many of the economies that have been hardest hit by the coronavirus pandemic and resulting lockdowns. But with signs that this part of the world may be through the worst of coronavirus, opportunities may have arisen to invest in quality companies at depressed valuations.

IC TIP: Buy at 1000p
Tip style
Growth
Risk rating
High
Timescale
Long Term
Bull points

New managers with good record

Performance improvement

Low ongoing charge

Quality companies at depressed valuations

Bear points

Discount already tightened

Baillie Gifford European Growth Trust (BGEU) looks like a promising way to access such investment opportunities. The trust changed the company that manages it from Edinburgh Partners to Baillie Gifford in November last year, since when it has performed very well. Analysts at Investec say that the change in manager has “dramatically reinvigorated the fortunes of the company”, wiping out nearly a decade of material underperformance in just six months.

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