1 top FTSE 250 investment trust to consider in February
FTSE 250 stock Baillie Gifford US Growth Trust (LSE:USA) has put shareholders through the wringer since debuting at 100p in 2018.
It launched like a rocket, charging to almost 400p in the first two-and-a-bit years. Then the stock crashed 65% in the next two-and-a-bit years, falling all the way back to 135p. Ouch!
Since then though, the share price has more than doubled to 281p. So this has been some wild ride.
Despite the whipsawing volatility, I reckon this FTSE 250 stock’s worth considering for long-term investors. Here’s why.
Public and private markets
The £777m trust’s purpose is to give investors “access to the most exciting growth businesses in the US, whether listed on public markets or still privately held“.
It can allocate up to 50% of assets to unlisted businesses. The reason for doing this is important — US start-ups are choosing to stay private for longer, meaning that more and more value’s being created away from public markets.
Much of the most powerful growth now occurs before an IPO. Capturing that growth requires a structure that can invest patiently and flexibly.
Baillie Gifford US Growth Trust.
This strategy was recently validated in spectacular fashion when top holding SpaceX announced it was considering one of the largest IPOs in history. The trust’s made exceptional returns from rocket pioneer Elon Musk after investing in Space X soon after launch.
We’ve moved on from the age of the unicorns (privately-owned businesses worth over $1bn). We’re now onto ‘hectocorns’ — those worth at least $100bn!
Today, the trust’s invested in four hectocorns (SpaceX, Stripe, Databricks, and AI firm Anthropic). All of these high-growth firms could go public in the next couple of years, helping the trust crystallise some gains.
Underperformance
Last week, the investment company released its half-yearly report to 30 November. In this period, it delivered an 18% and 14.1% return on a share price and net asset value (NAV) basis respectively.
While that was solid, this compares with a total return of 18.6% for the S&P 500. And since launch, the trust’s share price and NAV have returned 181.1% and 207.9% respectively. This is also behind the blue-chip index (220.5%).
So the trust has underperformed. And anyone who invested five years ago would still be down around 18%, which is obviously disappointing for shareholders.
If the managers’ key stock picks don’t perform in future, investors could lose faith in the strategy, widening the NAV discount (it’s currently 7.5%).
Top 10 Holdings (November 2025)
| Holding | |
|---|---|
| 1 | SpaceX |
| 2 | Stripe |
| 3 | Shopify |
| 4 | Amazon |
| 5 | BillionToOne |
| 6 | Nvidia |
| 7 | Meta Platforms |
| 8 | Netflix |
| 9 | Cloudflare |
| 10 | Databricks |
Strongly positioned
Looking at the top holdings though, I’m bullish on the trust’s prospects. There are multiple world-class companies here in various growth industries, including space (SpaceX), AI (Nvidia, Meta, Cloudflare) and e-commerce (Amazon, Shopify and Stripe).
Importantly, a key failure from 2020-21 — not banking some profits from highly-valued shares — has been acknowledged. In the first half, it reduced holdings where there had been significant share price appreciation. These included Shopify, Roblox, Affirm and SpaceX.
With this renewed discipline on valuation and the high-quality portfolio, I think the trust’s in a far stronger position than it was a few years ago. As such, I reckon itâs worth considering as part of a diversified Stocks and Shares ISA.
The post 1 top FTSE 250 investment trust to consider in February appeared first on The Motley Fool UK.
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Ben McPoland has positions in Cloudflare, Nvidia, Roblox, and Shopify. The Motley Fool UK has recommended Amazon, Cloudflare, Meta Platforms, Nvidia, Roblox, and Shopify. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
