Moving forward, the strategy will be known as the Baillie Gifford Monthly Income fund.

However, the fund’s investment process will remain unchanged. The strategy aims to deliver a natural monthly income alongside capital returns, which look to grow in line with UK inflation over the long term.

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The strategy will continue to be managed by Steven Hay, Lesley Dunn and Nicoleta Dumitru.

James Dow, who co-manages the firm’s Responsible Global Equity Income fund and the Scottish American Investment Company, has been replaced by Jon Stewart on the fund’s portfolio construction group.

Stewart will focus on property investing, while Dow will remain linked to the strategy as its equity allocation uses the Responsible Global Equity Income model.

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James Budden, head of global marketing at Baillie Gifford, said: “Ultimately, we believe the term ‘Monthly Income’ is more appropriate as it describes how the fund seeks to provide a resilient income stream and grow capital in real terms.

“No changes to the philosophy and process have been made to the Baillie Gifford Monthly Income Fund and we are confident that the name change gives investors greater clarity around their investment choice. We think this fund provides an excellent income solution for investors many of whom might be a long time retired.”

Additionally, the external fund manager will change. The £5.2bn fund had been run by Kirsteen Morrison and David Winborne at Impax Asset Management, but Schroders will take over as the fund’s sole manager going forward. The fund will also invest in Schroders’ Global Sustainable Growth and Global Value Equity investment strategies in order to increase the range of companies the fund can invest in.

According to St. James’s Place, the changes – which will come into effect from 24 February 2025 – will improve diversification and introduce a more balanced blend of investment styles, while maintaining the focus on sustainability, which is required to meet the FCA’s new higher threshold for sustainable investments.

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Ongoing charges will be reduced by 0.01% as a result of these changes.

Justin Onuekwusi (pictured), chief investment officer at St. James’s Place, said: “The bar to be a labelled fund is very high and will help clients to better understand how their money is being invested in companies that aim to deliver a positive outcome for people and the planet.

“Schroders is a well-regarded expert of sustainable investing, with a diversified approach. They have depth of experience across different equity investment strategies, which can provide a more balanced blend of investment styles for the fund.

“We’d like to thank the team at Impax for their expertise, partnership and their key role in the success of the fund to date. We continue to see Impax as a leader in investing in the transition to a more sustainable economy and a key partner for us in the future.”

Alex Tedder, co-head of equities at Schroders, added: “This investment allocation by SJP underlines the quality of our active investment process and commitment to delivering sustainable outcomes for our investors.

“Clients, investors and the industry are increasingly focused on bespoke investment solutions that can deliver strong risk-adjusted returns together with a comprehensive commitment to sustainability. Our broad-based capability and commitment to active management puts us in a strong position to meet client objectives in a rapidly transforming investment environment.”

This article was originally published by our sister title, PA Future