Baillie Gifford UK Growth Trust (BGUK) has seen a marked fall in its NAV during the last 12 months at a time when inflation expectations have risen, bringing with them interest rate rises and, quite possibly, a recession. The derating of many growth stocks has been severe and BGUK’s managers say that selling has been indiscriminate, with good companies being hit as well as the bad. However, this provides an opportunity for long-term investors in their view. They have been reappraising their investment cases in light of the strongly changing market conditions and have been adding to holdings that they think are fundamentally attractive. The managers believe strongly that their patience will be rewarded over the longer term. An NAV recovery could also be accompanied by a narrowing of BGUK’s discount, which is currently close to its five-year high.
15 Sep 2022
Baillie Gifford UK Growth - Patience will be rewarded
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Baillie Gifford UK Growth - Patience will be rewarded
Baillie Gifford UK Growth Trust PLC GBP (BGUK:LON) | 158 -3.2 (-1.3%) | Mkt Cap: 231.6m
- Published:
15 Sep 2022 -
Author:
James Carthew | Matthew Read | Jayna Rana -
Pages:
29
Baillie Gifford UK Growth Trust (BGUK) has seen a marked fall in its NAV during the last 12 months at a time when inflation expectations have risen, bringing with them interest rate rises and, quite possibly, a recession. The derating of many growth stocks has been severe and BGUK’s managers say that selling has been indiscriminate, with good companies being hit as well as the bad. However, this provides an opportunity for long-term investors in their view. They have been reappraising their investment cases in light of the strongly changing market conditions and have been adding to holdings that they think are fundamentally attractive. The managers believe strongly that their patience will be rewarded over the longer term. An NAV recovery could also be accompanied by a narrowing of BGUK’s discount, which is currently close to its five-year high.