Tesla is one of the Baillie Gifford US Growth Trust’s biggest holdings
(Picture: AFP via Getty Images)One of Britain’s most high-profile backers of tech has told investors to keep the faith despite a sell-off in the sector.
Baillie Gifford’s US Growth Trust today told shareholders to be brave and keep invested despite volatile markes.
Management wrote in its half-year report: “Investing in innovation and entrepreneurship is hard. Bravery is necessary from both entrepreneurs and investors. Uncertainty and volatility must be embraced. Opening your mind to possibility is essential.”
Scottish asset manager Baillie Gifford is one of Britain’s most prominent tech investors. Its FTSE 250-listed US Growth Trust manages £1 billion on behalf of clients. Top ten holdings include Netflix, Amazon and Tesla.
Tech stocks have faced heavy selling since the turn of the year as investors dump high-growth, low profit companies in anticipation of looming interest rate rises around the world. Netflix lost a fifth of its value in one day last week.
Baillie Gifford said in the Growth Trust’s half-year report: “The increased volatility of stock prices over the past six months has led to questions of bubbles, overheating, growth vs. value and what remains exciting. These questions are not unfounded, but most interestingly they are representative of the human condition; the human brain is wired to handle incremental change.
“The changes the pandemic has rendered have been fast and wide reaching. It is easier to believe we are heading toward a period of stasis, where the new ‘normal’ is bedded down. But what if we are at the tip of the iceberg of what change is still to come?”
The trust’s half-year report showed US Growth performed in-line with the market despite recent volatility. The value of its assets improved by 17.2% in the six months to 30 November, the same as the benchmark S&P 500 returned over the period.
Investments are likely to have had a tougher period since then: the Nasdaq, an index the Growth trust is heavily weighted towards, is down over 10% from recent highs and verging on bear market territory.
US Growth Trust shares gained 11.5p, or 5.5%, to 224.7p.
