Last checked at 4 Oct 2022 13:10
London, UK, 4 October 2022
Edison issues update on Baillie Gifford US Growth Trust (USA)
Baillie Gifford US Growth Trust (USA) has seen its net asset value (NAV) significantly fall in 2022 as growth stocks have fallen out of favour with investors. In addition, USA's share price has moved to a material discount to NAV for the first time since launch in March 2018. As a long-term fundamental investor, Baillie Gifford believes that the current investment opportunities in long-duration, high-growth stocks provide a tremendous opportunity for conviction investors, which could lay the foundations for the long-term outperformance of the fund.
Baillie Gifford is well known for its growth investment style; however, the US team arguably take this further than almost any other team. Its relentless focus on identifying tomorrow's leaders, often at a very early stage of their development in nascent and dramatically evolving markets within what is possibly the most prominent growth market in the world, sets it apart from the majority of its peers. In addition, the material weighting towards unquoted investments adds a further layer of differentiation. In 2022, growth as a style has fallen dramatically out of favour, which has negatively affected USA investor returns in both NAV and share price terms. However, the collegiate management team and long-term process have been in place over many years, over which time investors have been well rewarded. There are clearly risks in owning in some cases pre-profit and unquoted investments, which may guide investors to consider the position size for investments of this nature within diversified portfolios. The current discount to NAV of 19% could prove to be an attractive level to add to or initiate positions in USA.
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