Key points
- The US remains the world’s most fertile environment for exceptional growth companies
- Most long-term wealth creation comes from a small number of outlier businesses, making active stock selection critical
- The Baillie Gifford U.S. Equity Growth ETF (BGUS) seeks to identify tomorrow's market leaders before their future earnings power is fully recognized
Please carefully consider a Fund’s objectives, risks (including risk of loss), charges and expenses before investing. For these, see the prospectus and summary prospectus at bailliegifford.com/etfs. Please read these carefully before investing. Securities are offered through Baillie Gifford Funds Services LLC, an affiliate of Baillie Gifford Overseas Limited and a member of FINRA.
Why US growth?
America remains the world’s innovation engine – The United States has a long history of turning technological change into corporate profit. From semiconductors and software to cloud computing and artificial intelligence, many of the world’s most transformative businesses have emerged from the US. Today, that opportunity is as compelling as ever.
The US stock market’s outperformance in recent years has been underpinned by fundamental progress. America’s exceptional ability to commercialize innovation and scale businesses rapidly has produced stronger earnings per share (EPS*) growth than elsewhere in the world, as the two charts below show. “American exceptionalism” is therefore more than a slogan: it reflects the superior value creation of US companies.
Follow the fundamentals
Since 2010, stronger earnings growth (12-month forward EPS) has coincided with stronger equity returns, particularly in the US:
The index is not the whole opportunity – Passive exposure may provide efficient access to today’s winners, but it is naturally anchored to companies whose success is already visible. BGUS seeks to identify exceptional businesses before their future earnings power is fully reflected in market valuations. We aim to own the mega caps of tomorrow. The Fund is designed to complement broad US exposure by providing a differentiated source of potential return from a portfolio positioned for a world that may change faster than passive indices can adapt.
Outliers drive outcomes – A fraction of 1 percent of US companies have created roughly half of the net wealth generated by the stock market in the 100 years since 1926. This extraordinary concentration of returns sits at the heart of our investment philosophy. We believe the challenge is not to own every company that might succeed, but to identify the rare businesses capable of exceptional outcomes and hold them with the patience and conviction needed to capture their full potential. Diversifying a portfolio too far risks diluting the conviction needed to benefit fully from exceptional companies.
US wealth creation has been extraordinarily concentrated
|
46 companies 0.2% of the universe created half the net excess wealth |
29,081 companies created the other half |
US companies, 1926 to 2025. 46 companies from a possible 29,081.
Source: Bessembinder, H. (2026). One Hundred Years in the U.S. Stock Markets. Arizona State University, March 2026. SSRN.
Why the Baillie Gifford U.S. Equity Growth ETF (BGUS)?
Growth, not at any price – The strongest long-term returns have tended to accrue to companies with the fastest and most durable growth. We seek to exploit the market's tendency to underestimate long-term compounding by identifying businesses we believe will be among the top 20 percent of growers five years from now. These are the companies that tend to drive most of the market's five-year returns. We are not seeking growth at any price, but exceptional companies whose future earnings power is not yet fully reflected in today's valuations.
The bar for exceptionally high returns is high, so selectivity matters
|
18.1% of S&P 500 companies returned 2.5x+ |
81.9% did not |
Source: S&P. S&P 500 rolling five-year stock returns, 1985-2023.
The best-returning stocks also delivered the highest growth
Historically, stronger sales growth and stronger earnings growth among S&P 500 companies were each associated with higher median five-year returns, providing context for our focus on companies with long-term growth potential:
Reinvention that creates new growth engines – AI is the latest wave of change, not the whole opportunity. Throughout history, major technological shifts have created new profit pools by expanding markets, disrupting incumbents, and accelerating replacement cycles. The most attractive opportunities often emerge in the second- and third-order beneficiaries of change, which is why we focus on adaptable businesses with strong cultures, durable competitive advantages, and leaders capable of turning change into long-term growth.
From electricity to AI: reinvention that creates new growth engines
The US has repeatedly turned new technologies into new industries, new behaviors and new profit pools:
Three ways change becomes growth
Expansion
↓
New demand scales
Disruption
↓
Better supply wins
Replacement demand
↓
New systems = new needs
US Growth is looking for companies that can turn these patterns into long-term value creation.
Several routes to growth, not a single story – BGUS typically holds 30 to 50 companies, but it is far from a single bet on one theme. AI may be driving today's excitement, yet history suggests that the greatest value creation often emerges beyond the infrastructure layer as new technologies reshape industries and business models. We believe the next generation of winners will come from multiple sectors and growth drivers. We judge our holdings by their ability to turn structural change into customer value, pricing power, market share, and lasting profit growth, not whether they fit today's most fashionable narrative.
A portfolio built around several routes to future growth
Why Baillie Gifford?
Meet the U.S. Equity Growth team
Risk factors
The Funds are distributed by Baillie Gifford Funds Services LLC. Baillie Gifford Funds Services LLC is registered as a broker-dealer with the SEC, a member of FINRA and is an affiliate of Baillie Gifford Overseas Limited. All information is sourced from Baillie Gifford & Co unless otherwise stated.
As with all ETFs, 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 ETF 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 investments in the US, meaning it may offer less diversification and be more volatile than other funds. The Fund may have a smaller number of holdings with larger positions in each relative to other funds. Other Fund risks include: Conflicts of Interest Risk, Developed Markets Risk, Equity Securities Risk, ESG Risk, ETF Structure 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 ETF Risk, Periodic Rebalancing Risk, Risk Model Risk, Service Provider Risk, Small-and Medium-Capitalization Securities Risk and Valuation Risk.
Investing in Exchange Traded Funds (ETFs) pose additional risks including that shares trade on an exchange and may trade at a price greater than the NAV (a premium) or less than the NAV (a discount).
Shares bought at a premium may have a greater risk of loss than those bought at a discount. Shares are bought and sold at market price (not NAV) and are not individually redeemable.
Shares may only be redeemed directly from the Fund in Creation Units by Authorized Participants (APs). Where an ETF relies on a small number of APs, there is a risk if these APs exit the business or are unable to create or redeem shares. In this situation, Fund shares are more likely to trade at a premium or discount to NAV and could face trading halts.
Although shares are listed for trading on an exchange, there can be no assurance that an active trading market for the shares will develop or be maintained. Investors buying or selling shares in the secondary market may also incur bid-ask spreads, which represent the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept for shares and may widen during periods of market volatility or reduced liquidity.
Brokerage commissions may apply and will reduce returns. The market price of shares may fluctuate in response to changes in the value of the Fund’s holdings, supply and demand for shares and other market factors.
For more information about these and other risks of an investment in the Fund see “Additional information about principal strategies and risks” in the prospectus.
There can be no assurance that a Fund will achieve its objective.
This communication was produced and approved in July 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.
This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned.
The images used in this communication are for illustrative purposes only.
Legal notice: The S&P 500 Index is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
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