Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Keystone Positive Change. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

KPC’s board is proposing significant changes to the investment mandate and strategy...

Keystone Investment Trust (KPC) is to undergo a shareholder vote on 10/02/2021, with the board seeking approval for proposed changes to the management team and investment strategy.

As detailed under Portfolio, the board is seeking to appoint Kate Fox and Lee Qian of Baillie Gifford as named managers for the trust, and change the investment strategy. Going forward, the board is proposing that the trust targets capital growth from a global all-cap portfolio whilst adopting a comprehensive commitment to contributing towards a more sustainable world. This would represent a sharp shift from the existing strategy, which seeks to generate capital growth and income from investment primarily in UK equities.

The board consulted with major shareholders prior to finalising their proposals. As discussed under Discount, the subsequent period has seen little disclosed trading activity from notifiable shareholders, suggesting implicit support. The discount has since narrowed sharply, potentially an indicative sign of broader market interest in the new iteration of the trust.

This is possibly a result of the strong alignment of the proposed strategy with ESG considerations. Similarly, investors may have welcomed the change in manager given the very strong performance of the open-ended fund managed by the same managers, though past performance is not a guarantee of future returns.

Assuming, as we deem likely, the proposals are approved by shareholders, we understand that KPC is likely to employ structural gearing going forward. This is one of three differences proposed between KPC’s proposed strategy and that of the Baillie Gifford Positive Change fund, along with an allocation to unlisted companies and the ability to hold companies down to a market capitalisation of c. $500m, as discussed under Portfolio.

Kepler View

Evidently we are about to enter a transition period for Keystone. We believe it is probable that the board’s proposed change in strategy will be voted through by shareholders given the market reception to the news (as detailed under Discount). Existing shareholders will want to assess whether this change in strategy materially alters their rationale for holding the trust within their portfolio. For shareholders focussed on capital growth and agnostic on the underlying geographic exposure, we suspect the proposed wider opportunity set and investment universe will offer attractions. That said, it is a marked shift for existing shareholders, and being mindful of where we are in the stock market cycle, one that definitively changes both risks and potential rewards.

The shift in strategy is likely to bring the trust onto the radar of ESG conscious investors, with the process seeming to us likely to meet even the most stringent of ESG criteria. Along with the broader investment mandate we suspect it should furthermore broaden the shareholder base and attract an increasing retail following, with some evidence for this seen in the narrowing in the discount in recent weeks.

bull bear
Highly active strategy focussed on growth opportunities
Headwinds to growth factors would likely be a significant challenge to relative returns
Likely to appeal strongly to ESG conscious investors
Gearing can exacerbate downside, as well as amplify upside
Proposed managers have strong track record in their OEIC product
After a transition period, unlikely to offer a significant dividend
Continue to Portfolio

Fund History

10 Jun 2022 The digital classroom
Technology is making education more accessible and relevant. Thaiha Nguyen, an investment manager with Keystone Positive Change Investment Trust and the Baillie Gifford Positive Change Fund, explores the companies changing the way we learn...
06 May 2022 Future impact
What does the next decade have in store for impact investing? Kate Fox and Lee Qian, joint managers of Keystone Positive Change Investment Trust, tell Iona Bain about four big areas that could solve some of the world’s toughest challenges...
11 Mar 2022 Keystone Positive Change Investment Trust - Manager Insights
Joint fund manager Kate Fox provides a progress update on investing in companies delivering innovative solutions with a focus on sustainability, including the electrification of transport and biotechnology-enabled healthcare...
14 Jan 2022 Keystone Positive Change Investment Trust: Investing for Positive Change
In this webinar recording, Rosie Rankin, director at Baillie Gifford and Positive Change specialist, discusses impact investing and shares her enthusiasm for exploring areas and companies where profit complements purpose...
20 Oct 2021 Board games
Investment trust boards talk a good game about championing shareholders interests - but do they really deliver?
19 Aug 2021 Pandemic immunity
We ask which global equity trusts have outperformed through the different stages of the pandemic…
21 Apr 2021 Think Positive
How can we best invest to make life better for all, including the world’s poorest? Kate Fox and Lee Qian, joint managers of Keystone Positive Change Investment Trust, explain their approach to Jemima Kiss.
31 Mar 2021 A change in name, a change of strategy, it’s all positive
In this webinar recording, Rosie Rankin, a specialist on the Baillie Gifford Positive Change Team, speaks to Kate Fox and Lee Qian, investment managers of the Keystone Positive Change Investment Trust. The managers give a presentation on the details of the trust and some of the companies in which it invests, followed by questions from the attendees. Capital at risk.
05 Mar 2021 Keystone Positive Change Investment Trust
The aim of the Keystone Positive Change Investment Trust is to deliver attractive investment returns on behalf of shareholders over the long term, and to help shareholders contribute towards a more sustainable world. Investment managers Kate and Lee explain how they hope to do this. Capital at risk.
03 Mar 2021 Positively Radical
Investment and impact go hand in hand for the Keystone Positive Change Investment Trust. New to Baillie Gifford, the trust broadens its investment mandate under the watchful eyes of investment managers, Kate Fox and Lee Qian.
17 Feb 2021 Jungle Fever
Soaring interest in ESG has exciting implications, but risks pushing some stocks to distinctly unsustainable valuations...
09 Feb 2021 Fund Analysis
KPC’s board is proposing significant changes to the investment mandate and strategy...
07 Dec 2020 Flash update: Keystone Investment Trust
With the board announcing that Baillie Gifford will be taking over KIT, we look the new approach focusing on positive change…
21 Oct 2020 A closer look at gold mining companies and ESG
In this article, we hear from James Goldstone - fund manager of Keystone Investment Trust and Invesco Perpetual Select Trust: UK Equity Share on assessing mining companies within an ESG framework...
30 Jul 2020 James Goldstone
James Goldstone manages a number of UK and pan-European equity mandates at Invesco’s Henley-on-Thames office, including Keystone Investment Trust and the UK Equity Share Portfolio of Invesco Perpetual UK Select Trust...
01 Jul 2020 Oh the humanity...
We consider two strategies to cope with markets which, boosted by massive government support, may be witnessing the start of a ‘melt-up’ which may be followed swiftly by a melt-down...
15 Jun 2020 Investment Trust outlook
As the scale of the Covid-19 pandemic unfolds, James Goldstone explains his investment approach, what it means for markets, the companies he owns in his investment trusts, and how they are positioned for what may lie ahead...
06 May 2020 Fund Analysis
Now paying a quarterly dividend, KIT is a long-established trust with a valuation-focussed, bottom-up approach and a keen focus on governance...
08 Apr 2020 James Goldstone's UK equity strategy update
The sell-off across global markets has been widespread in recent weeks. Joanna Smith, UK Equities Product Director at Invesco, questions whether we have seen the market lows of this crisis yet...
23 Mar 2020 An approach to governance: creating long-term value for our clients
James Goldstone outlines why they advocate for proper and effective corporate governance and sustainable business practices within the Invesco UK Equities team...
09 Jan 2020 Full house
The KTI team’s ‘top picks’ for 2019 have delivered strong results…
18 Dec 2019 The squeeze continues: how trust costs keep falling
As pressure on costs remains, we reveal which trusts have achieved the most significant reductions in 2019….
29 May 2019 Fund Analysis
Keystone has moved to paying a quarterly dividend, making it potentially more attractive to income investors...
27 Mar 2019 NEVeR MiND tHE B*LL*CKS
We cut through the histrionics and discover, with surprising results, what life has really been like for British investors since David Cameron put it to 'the people'....
31 Dec 2018 Ladies, gentlemen and non-binary persons, start your engines…
With Britain only months away from the bright, sunlit uplands of Brexit and America officially ‘great’ again, we present our best ideas for what looks set to be a fascinating year…
24 Oct 2018 Fund Analysis
Keystone's portfolio has been revivified under the new manager, James Goldstone, and transitioned to a more value-orientated approach...
22 Nov 2017 A stock picker’s approach to managing the macro
Mark Barnett, Head of UK Equities at Invesco Perpetual, discusses the risks and opportunities facing the UK Equity market
25 Jul 2017 Carpe discount
Our analysis shows that there is a right time, and a wrong time, to seize a trust which is languishing on a discount...
13 Jun 2017 Fund Analysis
21 May 2017 Brave new world
We ask the top managers in each sector, region and asset class where they see the opportunities in the months ahead...
View all

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