Small caps bring risk of volatility

By James Thorneley The difference in the betas of Baillie Gifford Japan and Baillie Gifford Shin Nippon is an illustration of the higher volatility among smaller companies. Shin Nippon, which invests in smaller companies, has a beta of 1.19 times compared to Ballie Gifford Japan's beta of 0.81. Both are managed by Sarah Whitley who uses the same risk controls on the two trusts. She said: "Because neither trust has an appropriate benchmark we do not undertake a lot of Barra research. Instead, we look at the concentration of the portfolio." Baillie Gifford Japan has around 55 holdings, but...