Capital at risk

Investment strategy

US Discovery

The strategy builds on the longer-running Global Discovery Strategy but looks exclusively at the US – which we consider unmatched in its appeal.  

Smaller businesses often utilise novel technologies or approaches to solve key problems. The companies we seek offer better and cheaper solutions than the status quo. They challenge today’s incumbents shaping our future.  

Green and orange smoke dispersing in the air over a black background.

Ambitious companies solving today’s problems

We carry out in-depth research to unearth immature, disruptive companies. Once found, we want to hold them for the long term as they grow and scale. We mainly consider opportunities below $10bn market cap. However, at least 80 per cent of assets will be invested in companies with a market cap of $30bn or smaller.

Immaturity, not size, is the proxy for potential

The attraction of investing in smaller companies is the range of possible outcomes.

This can lead the strategy to display pronounced volatility, especially over the short- to medium-term. Yet investing early increases the possibility of a highly asymmetrical outcome. We aim to harness this to deliver overall strategy returns.

The strategy aims to outperform (net of fees) the Russell 2500 Growth Index, predominantly through capital appreciation, over rolling five-year periods.

Harnessing asymmetry to deliver long term

Our portfolio is constructed entirely from the bottom up, disregarding the benchmark. It has an extremely high active share and operates in a large investible universe. We position ourselves along the frontiers of innovation and technological development. 

What unites the companies we invest in is immaturity. We define this as: innovating to solve significant problems and reshape an industry, emerging competitive edge, quality and ambition of management, and scalability. 

This pursuit of immaturity is unique to US Discovery. 

We established the Discovery Strategy to capture the opportunity in the enduring supercycle of innovation.
Douglas Brodie

Meet the managers


Philosophy and process

Explore our investment philosophy and the processes around how the team constructs the portfolio.

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Strategy portfolio holdings

A list of the top 10 holdings that the representative portfolio invests in.

All figures up to: 31 March 2024

#Holding% of portfolio
1Axon Enterprise6.19
3TransMedics Group4.17
6Sprout Social3.61
9Varonis Systems3.16
10Twist Bioscience2.90

Strategy holdings by sector

All figures up to: 31 May 2024

1Information Technology35.56%
2Health Care29.64%
4Communication Services6.74%
5Consumer Staples4.63%
6Consumer Discretionary2.85%
10Real Estate0.38%
Total 100%

Strategy holdings by sector

All figures up to: 31 May 2024

Total: 100%

Strategy holdings by region

All figures up to: 31 May 2024

1North America92.92%
2Emerging Markets4.72%
Total 100%

Strategy holdings by region

All figures up to: 31 May 2024

Total: 100%

Please note

The information contained on this page is intended as a guide only and should not be relied upon when making investment decisions. All holdings information is unaudited. Source Baillie Gifford & Co. Please note that totals may not add due to rounding.

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Important information

The content of this website is intended exclusively for professional investors in accordance with MiFID legislation. ’Professional investors’ are potential investors who are deemed to have the status of “professional clients”, within the meaning of MiFID (2004/39/EC), as transposed in Ireland. It is not intended for retail investors.

Baillie Gifford Investment Management (Europe) Limited is authorised and regulated by the Central Bank of Ireland (Reference number C182354) as an Alternative Investment Fund Manager and UCITS Manager to Baillie Gifford Worldwide Funds plc. Its registered office is 4/5 School House Lane East, Dublin 2, D02 N279, Ireland.

This website is informative only and the information provided should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment. Read our Legal and regulatory information for further details.