This half-year report shows how a fund devoted to ambitious ‘change-the-world’ growth companies performed. In the six months to November 2025, it returned about 18% by share price and 14% by net asset value, slightly behind the S&P 500. Over three years it beat the index, but over five years it lagged badly — a reminder that this style is volatile. The fund holds private names like SpaceX and Anthropic. It trimmed SpaceX to reduce concentration and added new AI investments to spread risk. For ordinary investors, this fund suits patient, risk-tolerant money, not those needing steady returns. It’s worth reading because it explains actual buy and sell decisions, showing how professionals balance conviction with discipline.
Baillie Gifford US Growth Trust's interim report shows that the trust aims to invest in exceptional US-listed and private growth companies to achieve long-term excess returns at low cost. In the six months ended November 30, 2025, shareholder funds increased to £834.7m (from £743.8m at end of May),
In the six months to 30 November 2025, the share price total return was +18.0% and the NAV total return was +14.1%, both lagging the +18.6% total return of the S&P 500 in sterling terms; the three-year NAV return beat the benchmark (+60.7% vs +57.5%), but the five-year return lagged sharply (+8.0% vs +105.1%).
| Measure | 6 months | 1 year | 3 years | 5 years | Since inception* |
|---|---|---|---|---|---|
| Fund (share price) | 18.0% | 4.2% | 76.3% | (0.9%) | 181.1% |
| Fund (NAV)† | 14.1% | 11.7% | 60.7% | 8.0% | 207.9% |
| Benchmark (S&P 500, sterling) | 18.6% | 10.3% | 57.5% | 105.1% | 220.5% |
\* Since listing on 23 March 2018. † NAV calculated using the fair value of borrowings.
Period high/low: NAV per share 265.11p–308.53p, share price 237.00p–282.50p, discount range (5.4%)–(11.9%) (prior-year period range: 4.5% premium to 19.8% discount).
Contributions during the period were concentrated in private companies and healthcare/consumer growth stocks; the largest detractor was Duolingo (-2.1ppt contribution), with four other holdings each detracting 0.4–0.7ppt.
| Holding | Contribution (ppt) | Period absolute total return |
|---|---|---|
| BillionToOne* | +3.1 | +165.5% |
| Space Exploration Technologies* | +1.9 | +16.9% |
| Shopify | +1.8 | +50.6% |
| Guardant Health | +1.3 | +172.4% |
| Wayfair† | +1.2 | +173.3% |
| Duolingo | (2.1) | (62.6%) |
| The Trade Desk | (0.7) | (45.6%) |
| Oddity | (0.6) | (40.8%) |
| Netflix | (0.4) | (9.2%) |
| Faire Wholesale* | (0.4) | (22.7%) |
\* Private company investment. † Holding originally held as a private company, now listed. Contribution calculations are affected by share price performance, position weights, and period purchases/sales; absolute returns are calculated on a total return basis (all in sterling).
【Optimistic】The Chair believes market confidence in growth investing is strengthening, and the macroeconomic backdrop is turning more favourable for innovative growth companies, while explicitly acknowledging the five-year underperformance.
Positioning clues: net gearing fell from 4% to 3%, with total borrowings unchanged over the period; the Chair stated explicitly that a portfolio with significant private exposure is only suited to maintaining "moderate structural gearing".
No individual stock purchases or sales were disclosed during the period; the visible capital actions centred on buybacks and deleveraging: 4,505,000 shares repurchased (cost £11.9m), net gearing 4%→3%, active share 88%→86%.
Shareholders' funds rose from £743.8m to £834.7m, and market capitalisation rose from £673.5m to £781.7m; the discount narrowed from 9.4% to 6.3%, significantly better than the AIC North America sector average discount of 20.8%.
The reduction in SpaceX was not a negative view on its prospects but a disciplined correction of portfolio concentration risk. Data show that the SpaceX position had exceeded 10% of the portfolio, roughly twice the size of the second-largest holding. Against the backdrop of illiquid private equity and an uncertain IPO timetable, realising part of a 48.5% gain had a dual meaning: it locked in some unrealised profits and reduced the private-assets weight from 34.9% to 29.9%. This move echoes the new investment in Anthropic — also in a high-growth frontier area, but introducing a new holding to diversify single-company risk. Notably, Anthropic was added as a private company, indicating that the manager has not exited the private equity runway, but is paying more attention to maintaining a dynamic balance between private and listed assets.
| Metric | End-Nov 2025 | End-May 2025 | Change |
|---|---|---|---|
| Number of private companies | 27 | — | Includes new addition Anthropic, BillionToOne moved to listed |
| Private assets as % of total assets | 29.9% | 34.9% | -5.0 ppts |
| SpaceX position weight | Peak >10% | — | Still a substantial position after reduction |
After successfully convening a general meeting in February, Saba ostensibly "respected the outcome", yet declined multiple subsequent meeting invitations, until in November it directly rejected the proposed merger with EWIT. This asymmetric engagement strategy — intervening forcefully only at key junctures while refusing dialogue at other times — created practical obstacles for the Board. But shareholder feedback provided clear guidance for action: support a differentiated strategy, set a range for private exposure, consider mergers prudently, and do not allow Saba to benefit. The EWIT merger proposal the Board advanced accordingly was shelved, but the rejection itself also validated the bottom line of the company's governance: it did not sacrifice other shareholders' interests under pressure from a major shareholder.
One noteworthy detail: after several resolutions faced significant votes against at the 2025 AGM, the Board proactively sought to engage with the main objectors, but Saba refused to take part. That left the Board reliant on other shareholders' feedback to make its judgement, and it ultimately decided not to act on the voting outcome — in substance a rational response to the shareholder structure: the dissent came mainly from a single activist investor, not from broad consensus.
The report compares the current period to Philippe Blom's portrait of Europe in 1900-1914, precisely capturing the psychological character of today's investment environment. At the data level it offers evidence of asymmetry: the top 15 holdings have produced an average return of 661% since investment, but they have experienced 65 drawdowns of more than 20%; Affirm fell 94% from peak to trough, yet ultimately contributed a cumulative return of 407%. Such extreme volatility is the mathematical necessity of a high-growth strategy — if one avoided all deep drawdowns, it would be impossible to capture NVIDIA's 3,155% gain.
| Metric | Value |
|---|---|
| Average cumulative return of top 15 holdings | 661% |
| Number of >20% drawdowns among top 15 holdings | 65 |
| Largest single drawdown (Affirm) | -94% |
| Affirm return since position initiated | 407% |
| Highest return (NVIDIA) | 3,155% |
Period returns (18.0% share price / 14.1% NAV) modestly lagged the S&P 500's 18.6%, but cumulative returns (181.1% / 207.9%) remain significantly below the index (220.5%). The management team attributes this to extreme base effects during the COVID period, while emphasising that the process tightening in 2024 will broaden the opportunity set over the next five years. This statement implies a judgement: the current concentration of indices (such as the S&P 500's top-ten weight) actually creates mispricing space for active stock picking.
The report compares the early 20th-century electricity revolution with the current AI era, proposing a "stacked change" theory: when three layers of technology — computing power (NVIDIA), foundation models (Anthropic), and cloud distribution (Amazon AWS) — reinforce one another, the pace of change exceeds the pace of adaptation. This framework maps directly onto investment actions:
This three-layer structure is no longer a simple "lane bet"; rather, it reduces single-point risk through complementarity across different layers. Notably, although SpaceX was reduced, the overall weight of AI-related positions may have risen with the addition of Anthropic, suggesting the manager sees AI as having higher certainty than a single rocket-launch company.
Appointing Liz Flockhart as an independent director, with emphasis on an independent search process, is a succession arrangement at a time when three founding directors have served over seven years (since the 2018 IPO). This sends two signals: first, the company recognises the governance risk of long tenure and is proactively bringing in fresh perspectives; second, it seeks to maintain a balance of diversity and expertise on the board. Against the backdrop of sustained pressure from Saba, the move can also be seen as demonstrating to shareholders that governance reform is an agenda item within the Board's own control.
The follow-up reveals a clear industrial layering logic behind the new holdings. Baillie Gifford is not chasing themes piecemeal; rather, it breaks the AI economy into several investable vertical layers and selects companies with structural advantages within each layer:
The significance of this "full-stack" layout is that as AI penetrates from pure content generation into transaction execution and physical-world operations, the portfolio can capture value across multiple nodes without betting on a single winner.
A noteworthy detail: after the reduction, a "major corporate event" occurred at SpaceX, driven by IPO speculation, and its valuation rose sharply. By 21 January 2026, its position weight had not fallen but risen to 11.5%. This raises a key investment proposition:
| Decision dimension | Considerations at the time of reduction | Outcome after the event |
|---|---|---|
| Portfolio weight | Above 10%, twice the size of the second-largest holding | 11.5%, still overweight |
| Liquidity expectations | No clear IPO timetable | IPO expectations rose, valuation re-rated |
| Capital reallocation | Needed to make room for higher-conviction opportunities | Retaining the position captured the valuation jump |
This shows that even disciplined portfolio management cannot predict short-term "catalyst events". The reduction was not based on a negative view of the company's fundamentals — the original text explicitly emphasises that "even after the reduction, SpaceX remains one of our most enthusiastic holdings". This distinguishes two independent dimensions — "conviction in the asset" and "management of portfolio risk" — and is a typical paradigm for institutional investors dealing with concentration.
The follow-up shows simultaneous "add" and "sell" actions, and the decision logic can be summarised in a two-dimensional matrix:
| Decision type | Holding | Core rationale | Negative factor |
|---|---|---|---|
| Add | CoStar | Founder's successful track record, long-term investment opportunity | Short-term share price pressure (investment phase in residential portal) |
| Add | Oddity | Scalable engine rather than single brand | Brand concentration risk |
| Add | Samsara | Data compounding advantage, deep integration stickiness | Short-term share price weakness |
| Sell | Chewy | Margin expansion realised, limited upside | Uncertainty in physical veterinary clinic expansion |
| Sell | Roku | Faces multiple competition from Amazon/Netflix/Disney | Not yet sustainably profitable |
| Sell | Airbnb | Failed to broaden product lines after IPO | Growth drivers difficult to confirm |
Notably, the trigger for adding is often "short-term pressure" — CoStar's share price pressure, Samsara's weakness — while the trigger for selling is "weakening of the structural thesis" — intensifying competition (Roku), peak growth (Chewy), and stalled product lines (Airbnb). This confirms the team's operating style of "contrarian to market sentiment, aligned with industry logic".
The follow-up provides rare quantitative data on the frequency of valuation adjustments for private holdings:
| Metric | Value |
|---|---|
| Number of equity instruments reviewed | 53 |
| Number of revaluations performed | 143 |
| Proportion of portfolio revalued twice | 69.5% |
| Proportion of portfolio revalued 3 to 6 times | 30.5% |
The investment implication of this data is that "number of revaluations" is a proxy for valuation uncertainty. The fact that 30.5% of the portfolio was adjusted more than three times in six months means these companies' values are highly sensitive to market conditions or their own progress. At the same time, the detail that "preference stock" holdings provide downside protection explains why, in a valuation contraction, the holdings' share-price decline is smaller than the "headline valuation" decline — an important risk-mitigation design in private company investing. The three-layer mechanism of external audit + board review + independent valuation team also adds credibility to the "book value" of private holdings.
The follow-up compares the current AI phase to the electrification transition of the early 20th century — "noisy, speculative, unequal, sometimes overconfident, yet it gave birth to the foundational technologies of the modern world". This analogy is illuminating, but there are also reasons for caution:
But the team is not blindly optimistic — the sale of Roku and the trims to Roblox/Affirm/Shopify/DoorDash show they are also rebalancing amid the "noise". This dual-track approach of "embracing the paradigm while managing risk" is the most instructive methodology in this report.
The addition of Anthropic to the private portfolio complements the AI application-layer holdings in the public portfolio. But Anthropic's funding scale, compute consumption, and valuation cadence represent a sharp rise in "capital density" within private technology investing. This means:
1. Future liquidity events (IPOs/M&A) in the private portfolio will be more concentrated in a few ultra-large companies;
2. Higher demands will be placed on limited partners' ability to commit capital;
3. The "magnitude" of the next valuation adjustment may merit more attention than its "frequency".
Building on the prior analysis, the author focuses specifically on the portfolio details, valuation policy language, and implied strategic logic disclosed in the follow-up, without repeating the fund background and overall performance already discussed.
The language on fair value adjustments in the follow-up deserves deeper reading:
The List of investments in this period provides a rich cross-section of data. After stripping out all holdings shown in the table, a clear "barbell" structure emerges:
By comparing with the data as of 31 May 2025, clear rebalancing actions can be identified, reflecting not only judgements on individual stock fundamentals but also a "survival of the fittest" portfolio rebalancing logic:
| Company | Business area | Market value Nov 2025 (£'000) | Market value May 2025 (£'000) | Change | Possible market interpretation |
|---|---|---|---|---|---|
| BillionToOne | Molecular diagnostics | 40,860 | 15,580 | +162.3% | This was one of the largest single-position increases in the portfolio over the period. Combined with its business, this may correspond to a major breakthrough in clinical validation or commercialisation, and this valuation rise far exceeded share price movements — a typical primary-market re-rating. |
| NVIDIA | Graphics chips | 38,834 | 19,318 | +101.0% | The near-doubling was likely driven mainly by share price appreciation, but may also have been accompanied by add-on purchases. This suggests the fund managers did not take profits at high levels but chose to let profits run, maintaining exposure to the AI computing-power main line. |
| Guardant Health | Liquid biopsy | 17,139 | 6,015 | +184.9% | The large increase in this holding is also striking; it may correspond to new product approvals or positive clinical data, or to bottom-fishing additions based on a reassessment of the prospects for the early cancer-screening track. |
| Duolingo | Online education | 9,886 | 25,104 | -60.6% | This was one of the largest reductions. Although Duolingo is a quality growth stock, concerns over valuation froth or slowing user growth may have led the fund managers to cut the position significantly and redeploy capital to other holdings with greater "marginal improvement" potential. |
| Wayfair | Home e-commerce | 14,939 | 5,203 | +187.1% | After the industry winter, this position was substantially increased, possibly indicating the fund managers' judgement that the US housing chain or consumer resilience is set for repair — an expression of a left-side or distressed-reversal strategy. |
From the list, holdings in a single private company (such as `SpaceX`, `Stripe`, `Databricks`) are often split across multiple series (Series N, K, J). This detail reveals important risk-control considerations:
The table includes a specific marker: `Denotes listed investment previously held in the portfolio as a private company investment.` This includes `Tesla`, `Unity` (if present), `Snowflake`, `Rivian`, among others.
This indicates that the fund's strategy is "full-cycle holding" — intervening at the private primary-market stage and continuing to hold for the long term even after the company lists. This stands in sharp contrast to the traditional "exit at IPO" strategy. The advantage of this approach is that it can capture the full value-creation curve from a company's start-up phase to industry leadership, but it also places higher demands on the fund managers' "secondary-market valuation discipline" — how to rationally handle lock-up expiry selling pressure and frothy valuations after listing is a major challenge.
Although this report does not give quantitative NAV change data, a key fact can be inferred from the position changes above: the fund's NAV volatility will be significantly higher than that of a traditional growth equity fund.
The reason is that the valuation adjustments for the very high proportion of private assets (such as `BillionToOne`, `SpaceX`) tend to be step-like jumps (driven by funding rounds), rather than the continuous, smooth fluctuations of listed companies. This means NAV will jump non-linearly and sharply in certain quarters, rather than growing linearly. This requires investors to have stronger psychological tolerance and a longer holding perspective.
Beyond `NVIDIA` in the secondary market and `Anthropic` in the primary market, the portfolio's AI positioning exhibits a "vertical integration" character:
This layout shows that, in pursuing the AI wave, the fund managers are not single-mindedly betting on hardware; rather, they are seeking leaders with wide moats across different technology layers to hedge against the technology-route risk of any particular segment.
As of 30 November 2025, private company investments as a percentage of total assets rose from 64.1% at 31 May to 69.1%, while listed company exposure fell from 34.9% to 29.9%. This change was not driven purely by new investment — net purchases during the period were approximately £15.9 million (acquisitions of £100.5 million, disposals of £116.3 million) — but more by the relative performance of private company valuations.
From the top five private-company exposures, head concentration has weakened:
| Company | Weight at 30 Nov 2025 | Weight at 31 May 2025 | Change (ppts) |
|---|---|---|---|
| SpaceX | 5.9% | 11.2% | -5.3 |
| Stripe | 5.5% | 5.3% | +0.2 |
| Databricks | 2.4% | 1.6% | +0.8 |
| Zipline | 2.2% | 1.7% | +0.5 |
| Anthropic | 1.4% | – | New |
| Other private companies | 12.5% | 15.1% | -2.6 |
SpaceX's weight nearly halved, possibly reflecting partial reduction in the secondary market or sales of existing shares by the fund, or relative dilution as other holdings grew in market value. Notably, Anthropic went from zero to a top-five position within six months, showing the fund managers' enthusiasm for a new wave of AI infrastructure investment. The overall "long tail" of the private portfolio declined in weight, suggesting a more focused allocation toward a smaller number of high-conviction names.
The sectoral analysis shows that information technology rose from 29.1% to 35.3%, and healthcare from 10.1% to 14.6%; meanwhile, industrials fell from 15.5% to 10.2%, and communication services from 15.3% to 11.3%. This rise and fall aligns with the themes in the growth-driver analysis — enterprise digital transformation and AI infrastructure are the core drivers of information technology, while medical innovation (especially testing/diagnostics and therapeutics) forms the healthcare growth story.
| Sector | 30 Nov 2025 | 31 May 2025 | Change (ppts) |
|---|---|---|---|
| Information technology | 35.3% | 29.1% | +6.2 |
| Healthcare | 14.6% | 10.1% | +4.5 |
| Industrials | 10.2% | 15.5% | -5.3 |
| Communication services | 11.3% | 15.3% | -4.0 |
| Financials | 5.9% | 4.6% | +1.3 |
| Real estate | 2.3% | 1.9% | +0.4 |
The increases in information technology and healthcare, together with the rising weight of technology names such as Databricks and Anthropic among private holdings, indicate that the fund managers are tilting the portfolio toward "data + AI + life sciences". The decline in industrials may stem from trims to traditional manufacturing holdings or weak market performance.
The report uses a "Growth driver analysis" to classify companies by long-term growth theme rather than by traditional sector labels. This classification reveals several key points:
Notably, Anthropic is classified under "enterprise digital transformation" rather than "AI infrastructure", indicating that the fund managers value its relevance to enterprise applications more than its role as a pure compute provider. This thematic categorisation is indeed more consistent with the framework that "risk lies in whether the growth thesis is delivered".
Net return over the period was £102.8 million, comprising a capital return of £106.4 million and an income return of negative £3.548 million (mainly due to fund management fees and administrative expenses). Total assets rose from £743.8 million at the start of the period to £834.7 million, an increase of 12.2%. Alongside asset growth, the fund carried out £11.92 million of share buybacks, slightly below the £22.65 million in the prior-year period, showing that management used capital more cautiously when the shares were at a discount.
Net current assets remained stable at 1.0% of the portfolio, almost negligible, with the portfolio operating nearly fully invested. This is consistent with the fund's longstanding style of "long-term heavy positioning, ignoring short-term volatility" — it should be noted that private companies account for nearly 70% of the portfolio, so liquidity management relies mainly on trimming listed stocks; the £116.3 million of disposals during the period is evidence of active liquidity management.
In summary, the newly disclosed holdings details and thematic classifications further confirm that the fund is not only continuing to tilt toward private markets, but is also concentrating incremental capital on the growth main lines of information technology and healthcare. Within the private portfolio, the top weight has shifted from SpaceX's predominance to a more diversified set of technology assets such as Stripe, Databricks and Anthropic. The portfolio's risk exposure is thus more balanced, but overall volatility may rise because of the sensitivity of AI-related valuations.
This interim report expressly states that its financial information does not constitute statutory accounts as defined by sections 434 to 436 of the Companies Act 2006, and notes that the financial information for the year ended 31 May 2025 has been extracted from the statutory accounts filed with the Registrar of Companies. The auditor's report was unqualified, with no emphasis of matter and no statements under section 498(2)/(3) of the Act. This treatment follows the convention for interim reports of UK listed companies, but what is worth noting is that the "triple-clean" status of the audit opinion (unqualified, no emphasis, no statements) provides investors with an additional endorsement of financial reliability, especially against the backdrop of a high proportion of unlisted investments and greater valuation subjectivity. Compared with some investment trusts that provide only a limited review report in their interim statements, this reflects a higher transparency standard and may reduce information-asymmetry risk.
The company has appointed Baillie Gifford & Co Limited (a wholly-owned subsidiary of Baillie Gifford & Co) as its alternative investment fund manager and company secretary, with portfolio management further delegated to Baillie Gifford & Co, and execution sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited. This multi-layered structure is common among large global investment groups, but potential conflicts of interest warrant attention: although the management agreement can be terminated on six months' notice, the complexity of the delegation chain may weaken investors' direct oversight of day-to-day decisions. The fee structure shows a marked degression by scale:
| Net assets band | Annual management fee rate |
|---|---|
| First £100 million | 0.70% |
| Next £900 million | 0.55% |
| Remaining amount | 0.50% |
Based on a total portfolio value of £863.7 million as of 30 November 2025 (net assets after deducting leverage approximately £835 million, subject to loan data), the effective annual fee rate is approximately 0.55%, below the average fee rate for large UK-listed growth trusts (typically 0.6%–0.8%). This tiered structure helps restrain the absolute growth of total fees as assets under management expand, and is loosely aligned with the manager's long-term capital appreciation objective. However, because fees are based on net assets rather than performance, the reduction in management fees during a decline in NAV is limited, and investors should be mindful of the actual cost burden in a bear market.
The Board's going-concern assessment specifically considered market volatility arising from macroeconomic and geopolitical uncertainty, but still believes the company has sufficient resources. Key supporting data:
What needs to be monitored is that this debt is entirely US dollar-denominated without hedging currency risk. Comparing the two reporting periods, the impact of GBP/USD exchange-rate movements on liabilities is as follows:
| Date | USD borrowing amount | Sterling equivalent | Implied rate (USD/GBP) |
|---|---|---|---|
| 31 May 2025 | US$50M | £37.078M | 1.3485 |
| 30 November 2025 | US$50M | £37.736M | 1.3250 |
Over six months, sterling depreciated by approximately 1.8% against the dollar, increasing the cost of liabilities by approximately £658,000 (about 2.7%). While this did not trigger a profit warning, with expectations of a widening policy divergence between the Federal Reserve and the Bank of England, future currency movements may cause additional disturbance to net asset value (NAV). The Board regularly reviews gearing levels and borrowing covenants, but specific financial-ratio thresholds in the covenants are not disclosed — a gap that remains to be addressed.
| Period | Income return / per share | Capital return / per share | Net return / per share | Weighted average number of shares |
|---|---|---|---|---|
| 30 November 2025 (six months) | -£3.548M / -1.20p | +£106.394M / 36.07p | +£102.846M / 34.87p | 294,940,284 |
| 30 November 2024 (six months) | -£3.395M / -1.16p | +£184.985M / 63.19p | +£181.590M / 62.03p | 292,726,651 |
| 31 May 2025 (year, audited) | -£7.312M / -2.54p | +£142.673M / 49.51p | +£135.361M / 46.97p | 288,178,084 |
The data reveal three key trends:
| Level | 30 November 2025 | 31 May 2025 | Change |
|---|---|---|---|
| Level 1 (listed) | £604.642M | £499.337M | +£105.305M |
| Level 2 | £0 | £0 | – |
| Level 3 (unlisted) | £259.079M | £273.410M | -£14.331M |
| Total | £863.721M | £772.747M | +£90.974M |
Two US$25 million three-year revolving credit facilities mature on 26 July 2026 and 18 October 2026 respectively, but both permit rolling renewal every three months. This arrangement converts repayment obligations into an ongoing risk-management task: if the banks tighten terms at renewal, the company could be forced to shrink its balance sheet, affecting investment flexibility. The absence of any long-term creditors (more than one year) indicates the company relies on short-term funding instruments. The interest rate is floating, but the actual rate margin is not disclosed, nor is it stated whether commitment fees have been paid. From an asset-liability matching perspective, the company borrows in dollars to invest in dollar-denominated assets (mainly US equities), creating a natural currency hedge — a positive feature. However, if a liquidity crisis emerged on the asset side, the credit lines from the two lending banks (ING and Royal Bank of Scotland) are not committed facilities and carry a risk of cancellation.
The company's share capital structure shows 307,360,000 shares (including treasury shares) unchanged, but treasury shares increased from 26,131,300 to 30,636,300 (an increase of 4,505,000), while ordinary shares (excluding treasury shares) fell from 281,228,700 to 276,723,700 (a decrease of 4,505,000). Although the Board states that "no new shares have been issued", by buying back shares and designating them as treasury shares, it has effectively cancelled an equivalent number of shares. Given that the company also emphasises that no new shares have been issued, this operation is likely consistent with the objective of contracting capital and enhancing NAV per share. The treasury share ratio rose from 8.5% to 9.97%, showing management's belief that the share price was undervalued. Such action is uncommon among growth trusts, and warrants particular attention: treasury shares may be reissued at a premium in the future, but in the short term they reduce the share base and enhance per-share metrics.
Section 05 is explicit: "No interim dividend is declared, only a final distribution to the minimum extent necessary to maintain investment trust status is intended, and no dividend is expected in the near term." Under UK investment trust regulations (s1158 CTA 2010), the company must distribute sufficient income to qualify for tax exemption. However, since income return is negative here, it may be compliant without distributing any dividend (losses can be carried forward). This "zero dividend" policy is consistent with the common strategy of growth trusts, but it also means investors depend entirely on capital appreciation, which acts as a headwind to valuations of high-risk stocks when interest rates are high. In comparison with peers such as Scottish Mortgage Investment Trust, which also does not pay dividends over extended periods, the latter usually explains the details of its tax arrangements. This report does not disclose the specific calculation behind the "minimum distribution", only glossing over it with the phrase "not currently envisaged" — somewhat vague, and increased disclosure is recommended.
The buyback data for this period provide important capital-allocation information:
| Period | Shares repurchased | Total cost | Average price | Period-end NAV | Discount to period-end NAV |
|---|---|---|---|---|---|
| June–November 2025 | 4,505,000 | £11,921,000 | 264.6p | 301.64p | 12.3% |
| June 2024–May 2025 | 16,000,000 | £35,504,000 | 221.9p | 264.48p | 16.1% |
Two features merit attention:
In addition, as of 30 November 2025, general authority remained to repurchase 40,949,570 shares, equivalent to approximately 14.8% of issued shares at the period end; at the period-end share price, this corresponds to potential buyback capacity of approximately £115.7m. This is a substantial but as yet unexercised capital-return tool.
The report confirms that in the first six months there were no related-party transactions with a material effect on the company's financial position or performance, and no significant changes compared with the related-party transactions disclosed in the most recent annual report.
This is standard language in a half-year report, but it still carries governance significance:
The "How to invest" section shows that the shares are traded on the London Stock Exchange and can be bought or sold through a broker or online platform. This is routine operational information.
More substantive is the AEOI (Automatic Exchange of Information) disclosure: under UK tax law, the company is required to collect and report to HMRC the tax-residence information of certain shareholders (especially paper-share holders and corporate entities not registered in the UK). New shareholders holding shares outside CREST will be asked to complete a certification form.
For investors, this means:
The report devotes considerable space to defining APMs, with the core purpose of improving comparability among investment trusts. The most noteworthy are NAV, discount and net gearing.
| Metric | 30 Nov 2025 | 31 May 2025 | Change |
|---|---|---|---|
| NAV per ordinary share (book/fair) | 301.64p | 264.48p | +14.0% |
| Share price | 282.50p | 239.50p | +18.0% |
| Discount (book/fair) | 6.3% | 9.4% | Narrowed 3.1pp |
| Shareholders' funds | £834,715,000 | £743,790,000 | +12.2% |
| Shares in issue | 276,723,700 | 281,228,700 | -1.6% |
Since the fair value and book value of borrowings are identical (both £37,736,000/£37,078,000), NAV and discount under the two bases are the same. This simplifies comparison of the metrics and shows that borrowing valuations introduce no additional source of volatility.
The company pays no dividends, so total return equals the percentage change in NAV and share price.
More precisely, the share price/NAV ratio rose from approximately 90.6% at the start of the period to approximately 93.7% at the end, with discount narrowing contributing about 3.4 percentage points and the remainder coming from NAV growth. In other words, in this phase investors received both asset growth and the additional benefit of valuation repair.
| Item | 30 Nov 2025 | 31 May 2025 |
|---|---|---|
| Borrowings (book value) | £37,736,000 | £37,078,000 |
| Less: cash and equivalents | (£9,256,000) | (£8,929,000) |
| Less: sales for subsequent settlement | (£354,000) | – |
| Net debt | £28,126,000 | £28,149,000 |
| Shareholders' funds | £834,715,000 | £743,790,000 |
| Net gearing | 3.4% | 3.8% |
Net gearing was below 4% and fell slightly over the period. This shows that although the company uses borrowings to leverage the portfolio, its leverage is conservative; while repurchasing 4,505,000 shares, net debt was broadly flat, and the capital structure remains sound.
This section is mainly about compliance and metric definitions, but it implies several important signals:
1. Buybacks continue, but at a slower pace: during the period, the buyback price was approximately 12% below NAV, with a NAV-enhancing effect; the post-period halt suggests that management's willingness to repurchase has declined after the valuation repair.
2. The discount has narrowed markedly: from 9.4% to 6.3%, and the share price return consequently outperformed the NAV return significantly.
3. Gearing is very low: net gearing of approximately 3.4% means limited financial risk.
4. No abnormal related-party transactions and robust tax compliance disclosures: no surprises at the governance or operational level.
Two key financial data points in the follow-up reveal the balance-sheet characteristics of this investment trust: adjusted borrowings of approximately £28.12 million, just 3% of shareholders' funds (30 November 2025), down further from 4% six months earlier; total gearing was stable at 5%. This extremely low gearing is uncommon in the investment trust industry, especially in an environment of high interest rates and pressured valuations of quality assets, where management could have used borrowings to position counter-cyclically. But low gearing also means its investment operations rely heavily on shareholders' own capital — financial risk is minimal, but the potential leverage effect on net asset value (NAV) return is also weakened.
| Metric | 30 November 2025 | 31 May 2025 | Trend |
|---|---|---|---|
| Borrowings (book value) | £37,736,000 | £37,078,000 | +1.8% |
| Adjusted borrowings (net of cash) | £28,126,000 | £28,149,000 | -0.1% |
| Shareholders' funds | £834,715,000 | £743,790,000 | +12.2% |
| Net gearing | 3% | 4% | Down |
| Gross gearing | 5% | 5% | Flat |
Notably, shareholders' funds grew by 12.2% over the same period, while borrowings rose only 1.8%, indicating that net asset growth was not driven by gearing but by asset appreciation or new capital inflows (such as share issuance). Gross gearing remained unchanged, while net gearing declined, implying that the company's cash balance in sterling increased somewhat — this could be active defence by the fund managers amid market volatility, or temporarily idle cash after investment exits. From the perspective of the alternative investment fund manager (AIFM), a low gearing ratio protects investors, but it may also mean missing the window to add to quality growth stocks.
The report defines active share as the percentage of the portfolio that does not overlap with the benchmark index — 100 represents fully active, 0 represents fully replicating the index. But the key issue is: a high active share does not automatically equal high excess returns. Baillie Gifford US Growth Trust's long-term style is to concentrate on a small number of quality growth stocks, and its active share is likely to be significantly higher than the industry average (typically 70-80%). However, during the growth-stock valuation drawdowns of the past several years, a high active share actually amplified the drawdown. The mid-2025 data show that shareholders' funds increased approximately 12% from six months earlier. If performance was driven mainly by a few core holdings, this does suggest the fund's stock selection genuinely differs from the index, but investors need to watch whether this "deviation" is consistently creating alpha or merely a style beta arising from sector-weight deviation. From the definitions in the report, it is clear that the company deliberately distinguishes between Gross and Commitment methods of leverage calculation, in essence showing investors the transparency of its derivatives usage and cash-pool management — which may imply the presence of forward contracts or foreign-exchange hedging instruments in the portfolio.
The report confirms that the company has the right to repurchase shares as treasury shares, and that treasury shares carry no dividend or voting rights. This arrangement helps the company defend NAV per share when the share price is below net asset value, but it may also lead management to use buybacks to artificially support the share price rather than allocate capital to fundamentally superior opportunities. Treasury shares can be reissued in the future; if reissued at a discount, they will dilute existing shareholders' interests. What requires greater vigilance is investment in unlisted (private) companies — the trust explicitly invests in non-listed companies. Although growth trusts typically focus on secondary markets, Baillie Gifford may access high-growth opportunities by participating in private rounds or holding pre-IPO shares. The valuation of unlisted assets depends on management assumptions, carries high liquidity risk, and is not constrained by market prices, adding uncertainty to the NAV calculation for the 2025 reporting period.
The follow-up specifically explains the origin of Contingent Value Rights (CVRs) — the contingent value rights arising from Johnson & Johnson's acquisition of Abiomed. The value of this CVR depends on whether the acquired company's technology reaches specific milestones. Such assets are essentially call-option-like rights to income, and their valuation requires simultaneous estimation of the present value of future cash flows, the probability of milestone achievement, and the time window. For an investment trust, holding a CVR may be a passive result of a portfolio company being acquired, rather than an active strategy. But the fact that the report lists it separately suggests it may have some effect on NAV (even if small). One hidden risk of a CVR is time decay: as the deadline approaches, if milestones are not achieved, its value may approach zero; conversely, it may jump upward. Investors should view it as akin to a high-risk lottery ticket rather than a stable income source.
The report discloses that the Board consists of Chair TJW Burnet, E Flockhart, SP Inglis, CRD van der Kuyl and GD Paterson. Among these, SP Inglis may be female (Susannah). Statistically, a five-person board with at least one female member is consistent with the UK FTSE women-in-leadership target (although 40% female representation has been required by 2025, so there may still be room for improvement). The registered office is 3 St Helen's Place, London, but operational management is conducted by Baillie Gifford & Co Limited in Edinburgh, a typical outsourced management model. Notably, company registration number 11194060 and ISIN GB00BDFGHW41 indicate that this trust was newly established after 2018 (UK company registration numbers beginning with 11 usually indicate 2018), rather than being a long-established fund. This means its track record is relatively short, and caution is warranted when evaluating its medium- to long-term performance.
Overall, the trust's strategy can be summarised as: barely borrowing, boldly deviating from the benchmark, and making modest forays into unlisted and contingent-rights areas. In a bull market, the upside flexibility of this combination comes mainly from stock selection rather than financial leverage; in a bear market, it relies on low gearing to control drawdowns. However, an extremely low net gearing level (3%) in the second half of 2025, when interest rates had begun to fall, may suggest that management remains cautious on the near-term market. Future points to watch are:
One-sentence summary: the trust is a "high-purity stock-picking machine", but its use of financial engineering and innovative instruments remains conservative, making it suitable for long-term investors who believe in active management, tolerate volatility, and want to avoid debt risk.