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Baillie Gifford US Growth Trust: August 2022 trust update

In this investment trust update, Senior Investment Analyst Joseph Hill shares our analysis on the manager, process, culture, ESG integration, cost and performance of the Baillie Gifford US Growth Trust.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

  • The managers invest in companies they think will grow faster than the average company over the long term
  • Gary Robinson and Kirsty Gibson are prepared to hold onto companies for long periods to generate long-term capital growth
  • The trust has outperformed the AIC North America sector average since launch in March 2018 but has significantly underperformed over the last year

How it fits into a portfolio

The Baillie Gifford US Growth Trust invests in US companies that the managers think have the potential to grow faster than the average company. They then try to hold onto them for long periods of time, to generate long-term capital growth. These companies can be public or private. We think this trust could work well as part of an adventurous investment portfolio and could diversify portfolios which have little invested in the US. Investors in investment trusts should be aware that they can trade at a discount or premium to net asset value (NAV).


Gary Robinson joined Baillie Gifford in 2003 and has experience of working in their Japanese, UK and European equity teams prior to joining the US equity team. Kirsty Gibson joined Baillie Gifford after graduating in 2012 and has been a co-manager of the trust since March 2021. Robinson and Gibson are co-manager of a few other strategies at Baillie Gifford, including the Baillie Gifford American fund. These are run in a similar way though and share some of the same companies, so we think they are able to devote enough time to each.


Robinson and Gibson invest in US companies they think have the potential to grow faster than the average company, and then try to hold onto them for long periods of time. The managers think this will maximise their chances of achieving capital growth for investors, as over the long term strong business models and cultural strengths become the drivers of valuations.

The trust consists of both companies which are publicly traded on the stock market, and private companies. The managers think companies in the US are choosing to remain private for longer, and as such believe being able to invest in public and private companies offers them a wider opportunity set. Investors should be aware that private, or unquoted, companies carry more risk than public ones. Investing in smaller companies is also a higher-risk approach.

The trust can invest in a maximum of 90 companies, typically with at least 30 of these being publicly listed companies. Robinson and Gibson can also invest up to 50% of the trust’s assets (at the time of investment) in unlisted companies. At the end of the trust’s financial year in May, it had 24 unlisted investments, making up 36.4% of the trust’s assets. This is a significant increase from the 16.5% invested in private companies one year earlier. Currently, the trust invests in 74 companies, but it does have the flexibility to operate a concentrated approach and invest in derivatives, which if used adds risk.

The trust’s largest unlisted investment, accounting for 5.7% of its assets at the end of May is Space Exploration Technologies. The business designs, manufactures and launches advanced rockets and spacecraft. In the trust’s last financial year, the managers invested in seven new unlisted companies. Three of its existing unlisted investments also chose to list on the stock market for the first time. These were Aurora Innovation, Ginkgo Bioworks and Warby Parker.

The trust also borrows money to invest with the intention of increasing returns (sometimes known as gearing). This could magnify losses in a falling market and increases risk. Net gearing increased from 1% to 6% over the course of the trust’s last financial year to the end of May 2022.

Over its last financial year Robinson and Gibson made some changes to the trust’s investments. They bought shares in electric vehicle manufacturer Rivian Automotive and education company Duolingo. The latter’s language teaching app is the most downloaded education app globally. Some companies exited the trust too. Real estate technology company Zillow was sold after it announced that it was exiting the institutional home buying and selling market. Online used car dealer Vroom was sold too due to concerns about the competition the business faces.

The managers think that the pandemic has boosted the prospects of many companies they hold in the portfolio. They believe many of the companies they hold were already beneficiaries of structural technology led shifts in the economy, and the Covid period has just accelerated this.


Baillie Gifford is an independent private partnership founded in 1908. It's owned by partners who work full time at the firm. Gary Robinson, one of the trust’s co-managers is a partner at the firm. This ownership structure means senior managers have a vested interest in the company, and its funds and trusts under management, performing well. We think this has helped cultivate a culture with a long-term focus, where investors' interests are at the centre of decision making. We also like that managers are incentivised in a way that aligns their interests with those of long-term investors and should retain talented managers.

ESG Integration

The managers think sustainability goes hand in hand with being a long-term investor. Their focus on long-term growth opportunities typically involves investing in entrepreneurial, disruptive and technology-driven businesses. These companies are often capital-light with a low carbon footprint.

All of Baillie Gifford’s funds and investment trusts are run with a long-term investment horizon in mind – they see themselves as long-term owners of a business, not short-term renters. So, assessing whether society will support, or at the very least, tolerate, the business model over the long term, and whether management will act as good stewards of shareholders’ capital is an important part of the investment process. Dedicated ESG analysts sit with and report into their respective investment teams, and the firm’s ESG efforts are supported by a dedicated climate specialist team, an ESG Services team (responsible for voting operations and ESG data) and an ESG Client team (responsible for ESG-related client communications). Individual investment teams are responsible for voting and engagement for the companies they invest in. Investment in controversial weapons is prohibited across the firm.

The firm reports all its voting decisions and provides rationale in situations where it voted against management or abstained, in a detailed quarterly voting report. There is also a quarterly engagement report which details the companies engaged with, and the topic discussed, and further engagement case studies are available on the Baillie Gifford website. All this information is brought together in the firm’s annual Stewardship Activities report.


The trust's ongoing annual charge in the year to May 2022 was 0.62%. Investors should refer to the latest annual reports and accounts and Key Information Document for details of the risks and charging structure.

If held in a SIPP or ISA, the HL platform fee of 0.45% (capped at £200 for a SIPP and £45 for an ISA) per annum also applies. Our platform fee doesn’t apply if held in a Fund and Share Account.


Since the trust launched in March 2018 to the end of July 2022, its grown by 74.13%*, outperforming the 71.39% gain for the average trust in the AIC North America sector. Past performance is not a guide to future returns.

Although the trust has performed well since launch, it’s significantly behind the AIC North America sector over the past year. Over this period, the trust is 48.69% behind the AIC Investment Trust North America sector average. More recently the managers’ growth-focused investment style has fallen out of favour with investors. That’s mainly because inflation and interest rate expectations have been rising. The result is investors being less willing to pay up for companies with high growth potential, which has seen stock prices of some the trust’s investments fall significantly. One year is a short timeframe to consider performance though and the focus should be on the longer term potential. The managers typically invest in companies with a five year time horizon or longer.

Remember all investments fall as well as rise in value, so investors could get back less than they invest.

Annual percentage growth
Jul 17 -
Jul 18
Jul 18 -
Jul 19
Jul 19 -
Jul 20
Jul 20 -
Jul 21
Jul 21 -
Jul 22
Baillie Gifford US Growth Trust N/A** 23.14% 42.28% 59.91% -48.38%
AIC Investment Trust – North America 8.37% 13.47% -5.64% 42.86% 0.31%

Past performance isn't a guide to the future. Source: *Lipper IM 31/07/2022.

**N/A - Full year performance prior to March 2018 is not available.

Find out more about Baillie Gifford US Growth Trust including charges

Baillie Gifford US Growth Trust Key Investor Information

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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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