Fund Profile

Keystone Positive Change 21 September 2022


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.

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Keystone Positive Change (KPC) is one of the leading strategies in the ESG/Sustainability space, offering a clear, differentiated and trackable proposition built around identifying companies which are able to have the largest impact on solving critical social problems. The objective of having a positive impact on society through each of its investments is given equal priority to the more conventional objective of maximizing long-term shareholder return.

KPC’s management contract was taken over by Baillie Gifford in February 2021 and the investment mandate changed to focus on global stock markets with the dual objectives discussed above. However, the Positive Change mandate was launched in January 2017 in the open-ended space. Since launch, the strategy has performed extremely well in absolute and relative terms but 2021 was a tough year, as discussed under Performance.

KPC is managed with a focus on the long term and managers Kate Fox and Lee Qian aim to identify huge financial opportunities in solving serious social problems, looking to identify strong companies which are able to take advantage of these opportunities. Crucially, each company must have a product or service which directly tackles the issue at hand (see ESG). The long-term approach means the trust is highly active and this brings with it volatility in individual holdings and at the portfolio level for which investors must have the stomach. KPC aims to improve on the offer of the open-ended fund by using the closed-ended structure to the full, as we discuss under Portfolio.

As growth stocks have fallen out of favour over the past year, KPC has drifted out to a Discount of c. 13%.

Analyst's View

We think KPC should be considered by every investor who wants their money to work towards improving society, as well as generating a return. The strategy for assessing impact and potential impact is clear and easily interrogated by investors, while the commitment to providing information is second to none. The focus is on the long term, which is likely to lead to the greatest impact, rather than focussing on identifying companies which are making incremental improvements.

As for the return potential, the Performance of the mandate since the 2017 launch is instructive. KPC has generated very high absolute and relative returns over the whole period, along with extra volatility. There have been periods of very high outperformance and very low underperformance. This is a likely consequence of such a highly active approach, but it also, in our opinion, reflects the impact of the pandemic which created a highly specific set of circumstances which were first extremely good for the portfolio and then extremely bad. Such extreme outperformance and underperformance may not persist and we note that the target return of the trust is 2% above the annual return of the MSCI ACWI, on a five-year rolling basis.

In the short term, rising interest rates would be a net negative for the portfolio, as would a recessionary turn for the global economy. However, assessing the timing of macroeconomic and political shifts is notoriously difficult, and valuations may already reflect anticipated interest rate rises. The current, wide Discount could then provide an interesting entry point, although the trust is likely to suit only those with a long-term time horizon and a stomach for volatility.


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


  • Volatility brings with it 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 some 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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