The fund was originally added to the Wealth Shortlist as it provides investors with exposure to Baillie Gifford’s long‑standing investment philosophy of investing in exceptional US growth businesses. The managers’ long-term time horizon and the fund’s concentrated nature mean we have always expected performance to be volatile and look very different to the benchmark and peers at times. The fund can also invest in smaller companies, which are higher risk.
However, in recent years the level of volatility has been higher than we expected and has increased compared with peers.
Performance was particularly volatile during the COVID‑19 pandemic in 2020 and through to 2022.
We were encouraged that the managers reflected on the experience and introduced enhancements to the way the fund is constructed. They identified that certain areas of the fund were behaving too similarly, and that limits on specific investment themes were needed to help reduce unwanted correlation.
However, volatility has remained elevated compared to the fund’s peers.
Our view
In addition to higher levels of volatility, performance and stock-picking has recently been challenged and the fund hasn’t performed as well as its benchmark and some of its peers in recent years.
As a result, we no longer believe that clients are being adequately compensated for taking on this level of risk.
Further analysis of the sector shows that other growth-focused fund managers have delivered similar, and in some instances better, performance while taking significantly less risk.
We continue to believe the managers’ long‑term approach of focusing on exceptional US growth opportunities has the potential to deliver strong performance over the very long term. However, we believe it is suited to investors that can accept higher levels of volatility in their search for long-term returns.
Although we're removing the fund from the Wealth Shortlist, this isn't a recommendation to make any changes to an investment portfolio. Investors should make sure any investments match their investment goals and attitude to risk and are held as part of a diversified portfolio. If you're not sure if an investment is suitable for your circumstances, please seek personal advice.
Annual percentage growth
28/02/2021 To 28/02/2022 | 28/02/2022 To 28/02/2023 | 28/02/2023 To 29/02/2024 | 29/02/2024 To 28/02/2025 | 28/02/2025 To 28/02/2026 | |
|---|---|---|---|---|---|
Baillie Gifford American | -32.08% | -23.51% | 30.83% | 26.17% | -10.05% |
IA North America | 14.54% | 1.09% | 20.82% | 14.81% | 7.72% |