RESPONSIBLE GLOBAL EQUITY INCOME

RESPONSIBLE GLOBAL EQUITY INCOMERethinking Income Investing

Toby Ross

Responsible Global Equity Income

51646 INT PS 2378

Important Information and Risk Factors

1

As with any investment, your clients’ capital is at risk. Past performance is

not a guide to future returns. This is a marketing communication and

should not be considered as advice or a recommendation to buy, sell or

hold a particular investment. This document contains information on

investments which does not constitute independent investment research.

Accordingly, it is not subject to the protections afforded to independent

research and Baillie Gifford and its staff may have dealt in the investments

concerned. Investment markets and conditions can change rapidly and as

such the views expressed should not be taken as statements of fact nor

should reliance be placed on these views when making investment

decisions.

The Fund’s share price can be volatile due to movements in the prices of

the underlying holdings and the basis on which the Fund is priced. Baillie

Gifford & Co Limited is authorised and regulated by the Financial Conduct

Authority. Baillie Gifford & Co Limited is an Authorised Corporate Director

of OEICs.

All data is sourced from Baillie Gifford & Co unless otherwise stated.

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Calton Square, 1 Greenside Row, Edinburgh EH1 3AN

Telephone 0800 917 4752 Fax: 0131 275 3955 bailliegifford.com/intermediaries

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This presentation has been prepared for use by professional advisers and intermediaries only. It is not intended for

use by retail clients.


51646 INT PS 2378

Dependable income Growth in income and capital

Starting yield of 2.2%

Aim to grow the income every year

Expect long-term growth in income

and capital of 3% p.a. real*

Dual Objectives

Growth mindset

Building on Baillie Gifford’s platform

of research into growth companies

52%Stocks held by other

Baillie Gifford strategies

Track record

Successful record of long-term

income growth investing

11%p.a.

10 year total return of Global Income

Growth Fund

Sustainability expertise

Understanding of specialist ESG

strategies

29 yearsExperience of the strategy’s dedicated

sustainability specialist

Key Features

As at 31 December 2020.

*Based on manager’s view of at least 3% real earnings and dividend growth over the long term.

Global Income Growth Fund information has been included as an example of our long-term track record. This information is not a guide to the potential performance of the Responsible Global Equity Income Fund.

Why Responsible Global Equity Income?

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51646 INT PS 2378

Income from 100 invested ten years ago

Source: Eikon content from Refinitiv.

$2.3

€7.4

0

1

2

3

4

5

6

7

8

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Microsoft $ RWE €

Long-term Income, Not Short-term Yield

Total returns 2011-2020 (%) Microsoft RWE

Income return 47.6 24.2

Capital return 625.5 -35.9

3


51646 INT PS 2378

Responsible Global Equity Income top 10 dividend payers

Source: Bailie Gifford & Co, Eikon content from Refinitiv. Reflects dividend decisions as at 31 December 2020.

UK’s top 10 dividend payers

Our distribution to clients was unchanged for 2020

Growth Approach Pays Dividends

Past 5 years

Shell Cut

Vodafone Cut

Rio Tinto Cut

BP Cut

BHP Cut

Lloyds Suspended in 2020

HSBC Suspended in 2020

Astrazeneca Flat

GlaxoSmithKline Flat

BATS Grew

Past 5 years 2020 announcements

Coca Cola Grew Grew +2%

Roche Grew Grew +3%

Procter&Gamble Grew Grew +6%

Deutsche Boerse Grew Grew +7%

Sonic Healthcare Grew Grew +3%

Microsoft Grew Grew +11%

Fastenal Grew Grew +12%

Edenred Cut Cut -19%

Pepsico Grew Grew +5%

TSMC Grew Grew +11%

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51646 INT PS 2378

Companies with Bright Futures

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51646 INT PS 2378

Backing Great Management

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51646 INT PS 2378

ESG Research Framework

7

▪ Are governance structures aligned with long-term

investors?

▪ Are stakeholders aligned with the company’s

long-term success?

▪ What are the key sustainability challenges and

opportunities?

▪ What would engagement success look like?

Impact High Material Modest Neutral Positive

Ambition Deny Frustrate Progress Material Leader

Trust Broken Low Neutral High Full

Is it suitable for a Responsible investment fund?

Yes.

Clear ambition to address its impact, and deserves

our trust

Key Questions Example: Nestlé


51646 INT PS 2378

Exclusions

Rule-based

Exclude companies that derive more than 10% of their

annual revenues from:

Principle-based

Apply the UN Global Compact Principles for

Responsible Business

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51646 INT PS 2378

In our engagement we

Prioritise a business’s long-

term needs over short-term

considerations

Focus our efforts on where

we can have impact

Encourage each company

to consider their broader

impact on society

Support their strengths and

achievements

During the pandemic Our engagement priorities

Support companies trying to do the right thing

e.g. Carsales

Climate change

Encourage companies to invest for the long-term

e.g. Amadeus

Data security and privacy

Challenge if necessary e.g.

Hiscox

Responsible consumption

Engagement

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51646 INT PS 2378

Performance and Cost

10

Annualised Performance Cost vs Sector

1 Year %

Since Inception% (p.a.)*

Responsible Global Equity Income Fund (B Inc)

14.1 17.3

FTSE All-World 13.0 14.4

IA Global Equity Income Sector 3.3 8.1

1 Year %

3 Years % (p.a.)

5 Years % (p.a.)

Since Inception% (p.a.)**

Global Income Growth

Fund (B Inc)

14.5 10.8 14.4 11.3

FTSE All-World 13.0 10.1 14.5 11.3

IA Global Equity Income

Sector

3.3 4.9 9.4 8.6

0.0

0.4

0.8

1.2

1.6

OC

F %

0.93%0.53%

0.54%

The manager believes this is an appropriate target given the investment policy of the Fund and

the approach taken by the manager when investing. In addition the manager believes

appropriate performance comparison for this Fund is the IA Global Income sector.

Global Income Growth Fund performance has been included as an example of our long-term

track record. This information is not a guide to the potential performance of the Responsible

Global Equity Income Fund.

Source: FE, FTSE, total return in sterling. Periods to 31 December 2020.

Target: FTSE All-World.

*6 December 2018.

**1 March 2010

Management fee reduced to 0.5% (from 0.57%)

from 1 October 2020

Strong capital growth driven by our bias towards growing businesses


51646 INT PS 2378

From Traditional Income

Long-Term Income

Invests in

Sin stocks

Companies of the future

Considers

ESG as

Gavin Grant

ESG Specialist

29 years’ experience

Box-ticking A source of valuable insight

Engages

to achieve Higher near-term dividends Better long-term outcomes

Rethinking Income Investing

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51646 INT PS 2378

Legal Notices and Annual Discrete Performance

12

All information is current and sourced from Baillie Gifford & Co unless otherwise stated.

FTSE

Source: London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). © LSE Group 2020. FTSE Russell is a trading name of certain of the LSE Group companies. ["FTSE","Russell"] are a trade mark(s) of the relevant LSE Group companies and are used by any other LSE Group company under license. "TMX®"is a trade mark of TSX, Inc. and used by the LSE Group under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which ownsthe index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or datacontained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. TheLSE Group does not promote, sponsor or endorse the content of this communication.

31/12/15-

31/12/16

31/12/16-

31/12/17

31/12/17-

31/12/18

31/12/18-

31/12/19

31/12/19-

31/12/20

Responsible Global Equity Income Fund B Inc (%) - - - 25.3 14.1

Global Income Growth Fund B Inc (%) 26.0 14.4 -4.3 24.0 14.5

IA Global Equity Income Sector (%) 23.2 10.4 -5.8 18.6 3.3

FTSE All-World (%) 29.6 13.8 -3.4 22.3 13.0

Annualised Discrete Performance

Source: FE, FTSE, total return sterling. Target benchmark: FTSE All-World.

Questions

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RESPONSIBLE GLOBAL EQUITY INCOME