The Baillie Gifford European Smaller Companies fund is set to be given a new name and investment strategy in a revamp of the fund.

The £28.7 million fund will be renamed as the Global Discovery fund and will be given a wider investment remit to include global stocks.

The changes - subject to shareholder approval - will see the fund aim to provide 'above average total returns over the long term' by investing in companies the manager 'considers offer excellent future growth prospects'.

The move is a significant departure from its previous mandate, which aimed to achieve 'good returns' by investing in continental Europe and the Republic of Ireland.

The fund will continued to be managed Douglas Brodie, who took over management on the European Smaller Companies at the beginning of 2010, taking over from former manager David Walton.

The fund is set to keep its current charging structure, including a 5 per cent initial charge, 1.5 per cent annual charge, giving it’s a 1.59 per cent total expense ratio (TER).

It is unknown whether the fund will remain in the IMA European Smaller Companies sector. The IMA criteria stipulate funds  in the sector invest at least 80 per cent of their assets in European equities of companies forming the bottom 20 per cent of the European market by market capitalisation.

A statement from the asset manager added, ‘Subject to shareholder approval at an AGM to be held later this week, Baillie Gifford will change the name and investment mandate of the European Smaller Companies Fund to the Global Discovery Fund.

‘This reflects a broader change in much of the investment community where portfolios have moved from regional to global over the last 10 years.’

The European economy has been subjected to much uncertainty following the problems experienced by peripheral Eurozone countries such as Ireland, Portugal and Greece.