Annual Overview from QuotedData

Baillie Gifford UK Growth Trust PLC

08 August 2024

 

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Baillie Gifford UK Growth Trust - Annual Overview from QuotedData

8^th August 2024

Light at the end of the tunnel

As we discuss in the performance section on pages 14 to 23, Baillie Gifford UK Growth Trust (BGUK) has had a challenging three years, but with interest rates falling, this heavily growth-focused trust could be set for a significant period of outperformance (an environment of higher interest rates tends to be negative for most equities but particularly growth investments which tend to have a higher proportion of their value discounted back from some point in the future - a reversal of this could drive a rerating of growth stocks). This could trigger a substantial narrowing of its discount to net asset value (NAV), which is currently at levels seen during the depths of the COVID market collapse and seems nonsensical (see Figure 34 on page 29).

The scale of the opportunity and the board's conviction in the managers to deliver on this is such that, if shareholders approve continuation at this year's annual general meeting (AGM), the board is proposing that if performance does not turn around, it will offer shareholders an opportunity to realise their investment in full at a price close to NAV in 2029. In addition, they are saying that they will hold an extra continuation vote in 2027 (see page 32 for more details).

Full Research:

https://quoteddata.com/research/baillie-gifford-uk-growth-trust-light-at-the-end-of-the-tunnel-qd/

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NB: Marten & Co was paid to produce this note on Baillie Gifford UK Growth Trust Plc, and it is for information purposes only. It is not intended to encourage the reader to deal in the security or securities mentioned in this report. Please read the important information at the back of this note. QuotedData is a trading name of Marten & Co Limited which is authorised and regulated by the Financial Conduct Authority. Marten & Co is not permitted to provide investment advice to individual investors categorised as Retail Clients under the rules of the Financial Conduct Authority.

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