Bailard, Inc. was founded in 1969 by three alumni of Stanford Graduate School of Business, Tom Bailard, Larry Biehl and Ron Kaiser. In the 1990s, the company, which was initially named Bailard, Biehl & Kaiser, started to manage investments for pension funds, endowments and foundations, and launched a commercial real estate fund for high-net-worth individuals and institutions. In 2005, the company changed its name to Bailard, Inc. and introduced a tactical asset allocation strategy for Bailard Wealth Management Clients.
With around $3.6 billion in assets under management, Bailard is led by Peter Hill, who is the company’s CEO and Chairman; Burnie Sparks, President, and Sonya Thadhani, Executive VP, COO and CRO. Tom Bailard, the only founder that is still at the firm, assists with Bailard’s real estate investments.
The company pursues several strategies, each focused on a single asset class: equity, real estate, alternative investments, and fixed income. It uses both quantitative and qualitative approaches to identify investments for each of its strategies.
One of Bailard’s equity strategies is the Large Growth/Technology & Science strategy that is focused on tech and healthcare stocks. The strategy contains a diversified portfolio of around 70 stocks, which seeks to outperform the S&P North American Tech Index. The portfolio is mainly focused on tech stocks, with software, Internet software & services, semiconductors & equipment, and IT Services amassing over 70%. Over the last year, Bailard’s Large Growth/Technology & Science strategy returned 11.8% net of fees, while since inception, the strategy registered annualized returns of 5.8% net of fees, slightly underperforming the S&P North American Tech Index, which posted annualized gains of 5.9% over the same period.
In addition, Bailard also has an international equity strategy, which includes a portfolio of 125 to 200 securities from different countries. The strategy aims to generate returns comparable to the MSCI EAFE Index and returned 16.6% net of fees over the 12-month period ended June 30, underperforming the benchmark, which gained around 20.3%. Bailard’s other two equity strategies are Emerging Markets and Small Value. The Emerging Markets strategy posted an annualized return of 2.1% over the last decade, beating the benchmark MSCI Emerging Markets Index by 20 basis points.
Bailard Inc’s latest 13F filing revealed an equity portfolio worth $1.31 billion as of the end of September. The fund is heavily invested in ETFs, which represent 87 out of 297 positions, including the eight largest holdings in terms of value. Bailard’s ETF holdings collectively amass over 52% of its equity portfolio value.
In line with its tech-focused equity strategy, Bailard is also bullish on many technology stocks, five of which are among the fund’s top 10 non-ETF positions. In this article, we are going to take a closer look at these positions. Head to the next page for a look at its holding in Alphabet, Apple, and other tech giants.
In Accenture Plc (NYSE:ACN), Bailard Inc. had amassed 70,664 shares worth $9.55 million at the end of September. The fund has held shares of Accenture Plc (NYSE:ACN) since the fourth-quarter of 2008 and has seen the stock surge by over 300% since then. The global management consulting and professional services company recently reported its financial results for the fourth-quarter of its fiscal 2016, ended August 31. Accenture Plc (NYSE:ACN) posted EPS of $1.48 and revenue of $9.15 billion, beating the consensus estimates by $0.01 and $120 million, respectively.
Tech giant Alphabet Inc (NASDAQ:GOOGL) is Bailard’s fourth-largest non-ETF position, as the fund held 13,773 class A shares of the company valued at $13.41 million at the end of the third-quarter; between July and September, the holding was raised by 6%. Bailard also owns 7,244 class C shares of the company. Alphabet Inc (NASDAQ:GOOGL) has achieved great progress in many of its projects. Its developments in the AI space have allowed it to become one of the leaders in the smart home segment; it recently announced a new product, the Home Mini smart speaker to capture more market share in the smart home business. Alphabet Inc (NASDAQ:GOOGL) recently spun off its Project Loon into a standalone company, which develops balloons that can provide internet connectivity to remote areas. Another shareholder of Alphabet Inc (NASDAQ:GOOGL) is Bernard Selz’s Selz Capital, which initiated a stake containing 18,000 class A shares between July and September.
Facebook Inc (NASDAQ:FB) is another tech stock that Bailard is bullish on. During the third-quarter, the fund increased its stake in the company by 9% to 124,149 shares; the holding was worth $21.21 million at the end of September. Facebook Inc (NASDAQ:FB) continues to find ways to monetize its platforms in order to grow its earnings. Recently, the company released a food ordering service that allows users of Facebook to order food directly from the website. Facebook Inc (NASDAQ:FB)’s stock has advanced by over 50% since the beginning of the year.
Microsoft Corporation (NASDAQ:MSFT) is represented in Bailard’s equity portfolio by a $23.61 million position that contained 316,945 shares at the end of September. Year-to-date, Microsoft Corporation (NASDAQ:MSFT)’s stock has appreciated by 25% and it currently has a dividend yield of 2.17%. Microsoft Corporation (NASDAQ:MSFT)’s focus on cloud has been paying off handsomely for the company and analysts expect further growth, helped by its Azure cloud platform and Office 365. In other news, the tech giant recently decided to retire its mobile operating system Windows Phone. Another investor bullish on Microsoft Corporation (NASDAQ:MSFT) is Paul Holland and Matthew Miller’s Glaxis Capital Management, which raised its stake in the company by nearly 200% to 151,590 shares during the third-quarter.
Apple Inc. (NASDAQ:AAPL) is Bailard’s largest tech bet, with the fund holding 173,558 shares worth $26.75 million at the end of the latest quarter. Apple Inc. (NASDAQ:AAPL) recently announced several new products, including two new iPhones, the iPhone 8 and iPhone X, but there are concerns that the company won’t be able to meet the demand. However, the iPhone X did show Apple Inc (NASDAQ:AAPL)’s future direction in design and technology, such as the replacement of Touch ID with facial recognition.