By Mark McSherry
The £780 million Baillie Gifford US Growth Trust plc said its share price and net asset value (NAV) returned 24.5% and 22.1% respectively in the year to May 31, 2025, compared with a total return of 7.2% for the S&P 500 Index.
At May 31, 2025, the investment trust held 27 private company investments — about 35% of total assets.
Three new private company investments were made — in workforce management system Rippling, generative AI video platform Runway AI, and immersive entertainment company Cosm.
Five listed firms were added to the portfolio: DraftKings, Globant, Lineage, SharkNinja and The Ensign Group.
Investments sold during the period were 10X Genomics, Coursera, HashiCorp and Sprout Social.
At May 31, the biggest holdings in the fund were Space Exploration Technologies, Stripe, Netflix, Cloudflare, Amazon, Meta Platforms, Shopify, DoorDash, Duolingo and NVIDIA.
During the year, Baillie Gifford US Growth Trust was one of seven investment trust companies attacked by New York activist hedge fund Saba Capital Management “to convene general meetings of shareholders to … vote on resolutions to remove the Trusts’ existing directors and appoint highly qualified directors to replace them.”
At a general meeting, the fund’s shareholders decisively voted against all the requisitioned resolutions from Saba. “The total costs incurred in connection with the general meeting were £319,000,” said the fund.
Baillie Gifford US Growth Trust seeks to invest predominantly in listed and private US companies which it believes have the potential “to grow substantially faster than the average company, and to hold onto them for long periods of time, in order to produce long term capital growth.”
The investment trust is managed by Baillie Gifford & Co, the Edinburgh fund management group with £210 billion under management and advice in active equity and bond portfolios for clients in the UK and throughout the world.
Portfolio Managers Gary Robinson and Kirsty Gibson wrote: “As long-term investors, we anchor our approach for Baillie Gifford US Growth Trust on patience through volatility, conviction-led investing, and relentless focus on growth.
“Identifying tomorrow’s exceptional companies can be challenging, and success rarely unfolds smoothly. Our focus is therefore on identifying resilient, adaptable companies which are underpinned by structural growth drivers and whose trajectories are largely price-indifferent.
“Whilst periods of extreme volatility – such as that witnessed over the past five years – can appear daunting, they can also be periods in which truly foundational companies demonstrate their value. We believe that our investment team has the resource, access and expertise to identify these companies and hold them for long term growth.”
Baillie Gifford US Growth Trust chair Tom Burnet wrote: “I am pleased to report a strong period of performance for the financial year ending 31 May 2025. Your company has delivered excellent returns, with the share price and net asset value total returns reaching 24.5% and 22.1% respectively – significantly outperforming the S&P 500 Index’s 7.2% total return in sterling terms.
“Over the five years to 31 May 2025 the share price and net asset value returned 26.7% and 45.4% respectively. The comparative index returned 92.1% (total return and in sterling terms) over the same period … our five year performance is not where we hoped it would be.
“Following a thorough and methodical review the managers implemented a number of portfolio construction enhancements and guide rails to improve how they build and maintain a high-conviction, high-growth portfolio.
“Since we launched on 23 March 2018, we have delivered share price and net asset value total returns of 138.3% and 170.0% respectively, noting our net asset value total return has kept pace with the S&P 500 Index’s 170.1% total return (in sterling terms).”
Fund managers Robinson and Gibson added: “The company’s five-year relative performance remains weak, due to the base effect created by the extreme outperformance during the COVID period. We are disappointed with this but we are satisfied to have matched a period of strong growth from the index since inception …
“Sceptics will ask, why not simply own an S&P 500 tracker and get exposure to the US broadly and some of its biggest names.
“While passive investing can play an important role in many people’s portfolios, indexing gives cheap exposure to incumbents; it rarely grants meaningful stakes in the transformational growth companies Baillie Gifford US Growth Trust looks to invest in. It cannot provide access to the most exciting private businesses like SpaceX, Databricks, and Stripe.
“The company’s closed-ended structure lets us support such companies across listing boundaries, compounding value that a passive vehicle must wait to access – often at a far higher price.
“Generative AI’s emergence and President Trump’s tariff whiplash can make people feel uncomfortable and foster fear, but it is in these moments that builders thrive. Strong foundational cultures provide the scaffolding; adaptable created cultures scramble the workers to pour fresh concrete when cracks appear.
“Because, in the end, America’s greatness is not gifted by any administration; it is built – brick by stubborn brick – by founders and teams who see the city not as it is, but as it ought to be. Our job is to support the crane arm so that it can keep moving, regardless of who is in power.
“That is the American dream made real.”