Baillie Gifford US Growth Trust: Investing in the rapidly approaching future

London, UK, 25 September 2023

Baillie Gifford US Growth Trust: Investing in the rapidly approaching future

The managers of Baillie Gifford US Growth Trust (USA), Gary Robinson and Kirsty Gibson, aim to invest in exceptional US businesses with the potential to grow substantially faster than the market and deliver exceptional returns over the long term. Businesses capable of such growth tend to operate at the cutting edge of technology-led change, and USA has exposure to companies focused on artificial intelligence, space travel and drone delivery. The fluctuating fortunes of growth stocks over the past couple of years, combined with some de-rating of USA’s unlisted holdings, mean that USA’s performance has undershot market returns during the first five years since inception. Cumulative returns over the five years ended August 2023 totalled 49.1% in NAV terms, lagging the market return of 73.8%. However, the managers believe the ‘phenomenal’ fundamental performance of many portfolio holdings, combined with their very good growth prospects, augur well for the company’s ability to realise its return target over the longer term.

Baillie Gifford’s reputation as a long-term, patient investor in the US and in private companies gives USA’s managers the ability to access exciting unlisted opportunities, arguably a significant competitive advantage.

Viewed from a risk management perspective, an investment in USA can, arguably, be seen as offering investors insurance against a world that is changing far more quickly that traditional risk models acknowledge.

USA’s historically wide discount may offer investors the opportunity to gain exposure at a potentially attractive level.

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