Fund Profile

Keystone Positive Change 24 January 2024


This is a non-independent marketing communication commissioned by Baillie Gifford. 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 offers high return potential from a portfolio aligned to key social goals…

The strategy behind Keystone Positive Change (KPC) is to maximise long-term growth potential by selecting companies which can have a real impact on resolving some of the world’s critical problems. Both elements are written into the formal objectives of the trust, and all holdings have to qualify on both grounds, with strong long-term growth potential and a clear potential impact.

In practice, looking at the market through this lens creates a highly active Portfolio versus a global index, which is highly differentiated from its peers. Companies involved in the net zero transition, the expansion of financial services across developing countries, and biotechnology innovation sit alongside each other. The portfolio has a highly different geographical exposure than the typical global fund, including significant exposure to emerging markets. It also contains a handful of unlisted companies which, while making up a small amount of the portfolio at present, the managers believe have explosive growth potential.

This strategy has delivered exceptional returns in the long run for the open-ended Baillie Gifford Positive Change fund (see Performance). However, the first two years KPC has been managed to this strategy have been tough, with a sharply rising interest rate environment leading to a rush out of growth stocks. Kate and Lee are extremely optimistic for their portfolio, pointing to very attractive earnings growth expectations from lower valuations. Overall, they report their portfolio has been performing well operationally but is not being rewarded by the market. The board, while backing the new strategy, has taken action to reassure shareholders, initiating buybacks, which demonstrate the value they see in the portfolio, and announcing a continuation vote will be held after the strategy has a five-year track record.

Analyst's View

In our view, KPC is a stand-out option for investors who want to have a positive impact with their investments. While concepts like ESG and sustainability are bandied about widely, they are often poorly defined and investors are quite rightly concerned about ‘greenwashing’. When it comes to KPC, the Positive Change strategy is clearly defined, with the rationale for each company explained and progress discussed each year. We think it should appeal to the large number of investors who want their investments to have a positive impact.

The strategy also brings exposure to some secular growth themes with exciting potential. These include the expansion of services and the ability to start a business amongst the disadvantaged, the development of drugs for an aging world population, and the development of cleaner ways of generating energy and operating industry. A focus on long-term growth is out of fashion at the moment, as high interest rates see investors look to shorter-term returns, and we note stylistic factors tend to mean revert. Should we see rates start to come down in 2024, we think this could lead to a re-rating of many companies in KPC’s portfolio, and it could potentially lead to the Discount narrowing too.

Clearly the first two years under this strategy will have been disappointing for shareholders (and indeed the managers), but we think a highly active strategy like this needs to be judged over a longer timeframe, such as the five-year period used by the board for scheduling the continuation vote.


  • Unquestionable commitment to affecting positive social change, in line with ESG themes
  • High return potential from highly active approach
  • Makes use of closed-ended funds’ advantages: gearing, unlisted investments and mid-cap companies


  • Volatility brings underperformance potential
  • Exposure to growth factor and rising interest rates could lead to periods of underperformance
  • All impact or ESG propositions bring with them some subjectivity and selectiveness in which goals to pursue
Continue to Portfolio

Fund History

08 Mar 2024 Keystone Positive Change: the outlook for 2024 and beyond
In this webinar recording, Lee Qian, co-manager of the Keystone Positive Change Investment Trust, provides an update on investment performance and discusses the outlook for 2024 and beyond. Lee also explains the positive impact that companies within the portfolio are making...
26 Jan 2024 Keystone Positive Change Investment Trust: manager insights
Baillie Gifford’s Lee Qian provides an update on the Trust’s performance and holdings, how companies in the portfolio are contributing to a more sustainable future, and explains why an era of constrained financing could benefit strong growth companies...
24 Jan 2024 Fund Analysis
KPC offers high return potential from a portfolio aligned to key social goals…
06 Oct 2023 Are you ready for your closeup?
We explain how the professionals go about building a peer group…
07 Aug 2023 Connecting with Brazilian change-makers tackling social problems
Keystone Positive Change Investment Trust’s Ed Whitten meets Brazilian firms seeking social impact and growth, as well as some of their customers...
16 Jun 2023 Transformative investment: a new approach to a sustainable future
Baillie Gifford investment manager Kate Fox discusses the Deep Transitions research project and its implications for investing in a more sustainable future...
09 Jun 2023 Positive change in challenging times
Baillie Gifford’s Rosie Rankin, director of the Keystone Positive Change Investment Trust, gives an update on portfolio performance, company research and opportunities for the year ahead...
24 May 2023 Fund Analysis
KPC is a stand-out option for investors seeking to have an impact with their money…
03 Mar 2023 Keystone Investment Trust - Manager Insights
Baillie Gifford’s Kate Fox, co-manager of the Keystone Positive Change Investment Trust, explains the trust’s objectives, gives an update on the portfolio and discusses the outlook for company holdings...
21 Sep 2022 Fund Analysis
KPC is a stand out option for investors seeking to have a positive impact on the world in line with ESG concerns…
17 Aug 2022 The world for sale
While investment trusts are lagging their open-ended cousins in the global sector, their discounts may provide an attractive entry point...
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...
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 Portfolio on assessing mining companies within an ESG framework...
19 Aug 2020 A champion for shareholders
A quick look at the steps which the Board of Keystone Investment Trust plc (Keystone) has taken to make things better for shareholders…
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...
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 a selection of 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...
26 Jul 2018 Is the UK keeping this investor awake at night?
Over a year on from taking over his UK equities trust mandates, Invesco's James Goldstone discusses his outlook for UK markets...
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