Baillie Gifford US Growth Trust: September 2026 update

• 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 invest in companies for long periods to increase the potential to benefit from long-term growth

• The trust invests a significant amount in private companies

How it fits in a portfolio

Baillie Gifford US Growth Trust invests in US companies that the managers think have the potential to grow faster than the average company. They aim to invest for the long term to increase the potential to benefit from a company’s longer-term growth. These companies can be public or private (companies not currently listed on a stock market).

This trust could form part of an adventurous investment portfolio and 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).

Manager

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 co-managed the trust since March 2021. Robinson and Gibson co-manage a number of other funds at Baillie Gifford, including the Baillie Gifford American fund. These are run in a similar way to this trust and invest in some of the same companies, so we think they’re able to devote enough time to each one.

US hedge fund Saba Capital Management has proposed three directors for election at the trust's next Annual General Meeting (AGM) on 23 October. All three nominees are employees of the hedge fund.

Although Saba has not made its full intentions clear, if the proposed directors were to replace the trust's current four board members, they would have the power to remove Baillie Gifford as investment manager and appoint Saba's own managers instead. This is similar to what occurred at Impax Environmental Markets Trust. Saba have said that their appointees would offer shareholders a cash exit at 100% or near NAV.

If Saba were to replace Baillie Gifford as manager of the trust, there is no guarantee that the trust would continue to follow its current investment mandate. There is also uncertainty over whether shareholders would retain access to the private company investments that currently form part of the portfolio.

The board of the trust have unanimously recommended shareholders vote against the resolutions arguing it severely compromises the independence of the board who are in place to act in shareholders’ best interests.

How to vote

At HL we believe that voting is key for shareholders to ensure that the companies they invest in are run in line with their interests

The general meeting is set to take place at 1pm on 23 October, with the deadline to view on the HL platform 7pm on 20 October.

How to give an instruction

You’ll be taken to a website managed by a third party called Broadridge to complete your instruction. HL is not responsible for the content on this website.

Full details on how to vote can be located here - AGMs and Shareholder Voting | Hargreaves Lansdown

Process

The trust aims to invest in exceptional US businesses with strong growth prospects and hold them for long enough to reap the rewards.

The managers invest in both companies that trade on the stock market, and private companies that don’t. They believe this gives the trust a greater range of opportunities – though investing in private, or unquoted, and smaller companies increases risk.

Robinson and Gibson can invest up to 50% of the trust’s assets (at the time of investment) in private companies. As at the end of August 2026, 26 private investments made up 28.5% of the trust’s assets, compared with 27 companies and 33.8% one year earlier. The trust’s public investments are spread over 46 companies. It has the flexibility to invest in derivatives, which if used can add risk.

The trust’s largest private investment, accounting for 12.1% of its assets at the end of August, is Space Exploration Technologies (SpaceX). The business designs, manufactures and launches advanced rockets and spacecraft, offers internet broadband services through Starlink and is developing AI products. The company recently completed an initial public offering (IPO), listing on the stock market.

In the trust’s financial year to the end of May 2026, the managers invested in two new private companies, Anthropic and Open AI. Both are well known AI companies with Anthropic being best known for Claude and Open AI known for ChatGPT.

Robinson and Gibson have also recently invested in several public companies, including semiconductor firm Broadcom and Axon Enterprise, a technology company that manufactures TASERs and body cameras, as well as software used to capture, manage and store digital evidence. They also purchased Google owner Alphabet, having previously sold the company five years ago. The team believes Alphabet is well positioned to benefit from the growth of AI, given its vast repository of consumer data.

The managers sold their long standing advertising investment The Trade Desk, as they feared there was growing competition from Amazon. They also sold online homestay company Airbnb, social media company Pinterest and biotech companies Ginkgo Bioworks and Sana Biotechnology

The trust can borrow money to invest with the intention of increasing returns (known as gearing). This could magnify gains in a rising market, but also increase losses in a falling market. At the end of August 2026 gearing was 3% marginally below the 5% from last year.

Culture

Baillie Gifford is an independent private partnership founded in 1908. It's owned by partners who work full time at the firm – including Gary Robinson. 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

All of Baillie Gifford’s funds are run with a long-term investment horizon in mind. The firm’s fund managers 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 Environmental, Social, and governance (ESG) analysts sit with and report into both their respective investment teams, and the central ESG function. The firm’s ESG efforts are supported by a dedicated Climate team. Individual investment teams are responsible for voting decisions 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 votes against management or abstains, 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 website. All this information is brought together in the firm’s annual Investment Stewardship Activities report.

Baillie Gifford withdrew from the Net Zero Asset Managers’ Initiative and Climate Action 100+ in 2024, citing concerns that membership had become contested and risked distracting from its core responsibilities. We viewed this as a disappointing backward step, but the firm stated that this decision did not change its approach to analysing climate-related risks or engaging with investee companies

Although, the managers of this trust integrate ESG throughout the investment process, and into every investment decision, this is not an ESG or sustainable trust.

Cost

The trust's ongoing annual charge in the year to May 2026 was 0.70% - a marginal decrease from 0.72% the previous year. Investors should refer to the latest annual reports and accounts and Key Information Document for details of the risks and charging structure.

The annual charge to hold investment trusts in the HL ISA, SIPP, or Fund & Share Account is 0.35% (capped at £150 p.a. in each account) and 0.25% in the HL Lifetime ISA (capped at £45 p.a.). There are no charges from HL to hold investment trusts within the HL Junior ISA.

As investment trusts trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges.

Performance

Since launch in March 2018 the trust has returned 229.9%* (to the end of August 2026), the trust has underperformed the S&P 500 which has returned 244.4% however, they have outperformed the average trust in the AIC North America sector which returned 189.9%. In this time the trust’s Net Asset Value (NAV) has risen 269.4%. Past performance is not a guide to future returns.

The trust has had periods of strong performance, but has also struggled when the managers’ growth-focused investment style has been out of favour with investors, such as in 2022. More recently the managers growth style of investing has generally been in back in favour and performance has recovered.

Over the financial year to the end of May the trust returned 44.5% compared to 29.8% for the S&P 500 and 29.3% for the average trust in the AIC North America Sector. The trust’s NAV grew by 26.1%.

Several of the strongest contributors over this period were private companies. This includes SpaceX, which was still a private company in May, and saw its valuation rising ahead of its highly anticipated IPO. AI company Anthropic also delivered strong returns following a significant increase in revenue. Among publicly listed holdings, semiconductor giant Nvidia was the standout performer as the company continued to deliver impressive revenue growth driven by strong demand for its AI-related products and services.

Not all holdings performed as strongly over the period. Among the detractors was language-learning platform Duolingo, where concerns over slowing growth and increasing competition from AI weighed on sentiment. Online streaming platform Netflix also struggled following its unsuccessful attempt to acquire Warner Bros. Discovery. Online cosmetics company Oddity Tech was another notable detractor after a spike in customer acquisition costs saw revenue guidance cut.

Investors should note the managers’ long time horizon and investments in private companies means performance can be volatile and look very different to the benchmark.

At the time of writing, the trust trades on a discount of 5.04%, in-line with its 12-month average discount of 5.07%. Since inception the trust has on average traded at a 5.41% discount.

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