Funds and investment trusts run by Baillie Gifford have had an extremely difficult past 12 to 18 months as the growth style of investing has fallen out of favour . The asset manager refers to itself as “ unashamedly optimistic ”, which leads it to invest in companies with valuations based on future earnings , often many years into the future . When interest rates rise , as they did last year , these companies become worth less . Baillie Gifford ’ s flagship trust ,
Scottish Mortgage , fell 45.7 % in 2022 , while others such as
Schiehallion and
Baillie Gifford US Growth fared even worse . The
Monks Investment Trust didn ’ t do as badly , but its losses of 31.2 % last year mean its 10-year numbers have fallen back towards those of its FTSE World benchmark . A significant proportion of this fall can be attributed to a widening of its discount , with its NAV moving from around par to -10.5 % – even after the board bought back 19 million shares . Its underlying holdings only dropped by 23 %. The trust is not as racy as many of its peers at Baillie Gifford . It splits its portfolio into three company types : stalwarts , which are dependable businesses that compound profits every year ; cyclicals , the fate of which is more reliant on the performance of the economy ; and rapid growers , which are innovating in a way that allows them to quickly take market share . It is this last group where there is the most crossover with other
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