Key Beliefs
As with all mutual funds, the value of an investment in the Fund could decline, so you could lose money. The most significant risks of an investment in the Baillie Gifford US Equity Growth Fund are Investment Style Risk, Growth Stock Risk, Long-Term Investment Strategy Risk, Geographic Focus Risk and Non-Diversification Risk. The Fund is managed on a bottom up basis and stock selection is likely to be the main driver of investment returns. Returns are unlikely to track the movements of the benchmark. The prices of growth stocks can be based largely on expectations of future earnings and can decline significantly in reaction to negative news. The Fund is managed on a long-term outlook, meaning that the Fund managers look for investments that they think will make returns over a number of years, rather than over shorter time periods. The Fund focuses on investment in the US, meaning it may offer less diversification than other funds. The Fund may have a smaller number of holdings with larger positions in each relative to other mutual funds. Other Fund risks include: Conflicts of Interest Risk, Equity Securities Risk, Focused Investment Risk, Government and Regulatory Risk, Information Technology Risk, IPO Risk, Large-Capitalization Securities Risk, Liquidity Risk, Market Disruption and Geopolitical Risk, Market Risk, New and Smaller-Sized Funds Risk, Service Provider Risk, Small-and Medium-Capitalization Securities Risk and Valuation Risk.A small number of exceptional businesses will dominate stock market returns in the decades to come. These businesses will generate substantial and enduring growth, made possible by the strength of their business models and corporate cultures. Over time, this growth will become the dominant driver of their share prices and will deliver outstanding returns to patient shareholders.
We search for a clear distinction between our view of a company’s prospects and that implied by the prevailing share price. The upside for successful stocks is unbounded, so our research prioritises the implications of things going right. We place as much importance on understanding each company’s purpose, ambition, and culture as we do on competitive positions. It’s both a creative and an analytical process with uncertain outcomes and wide error ranges.
Our culture is central to our ability to invest this way. We are tolerant of uncertainty and we are empowered to maintain bold positions in concentrated portfolios. We believe that this gives us the best chance of delivering great investment performance to our clients.
- KEY INSIGHTCultural AdvantageCorporate culture is one of the things which separates exceptional growth companies from the merely good or average ones. Our aim in Baillie Gifford’s US Equity Growth strategy is to find these outstanding companies and it is rational that we should focus a significant proportion of our research efforts on analysing culture. One of the key questions in our US equity research framework is – “How does the company’s culture align with its long-term ambitions and is this a source of competitive advantage?”
