Baillie Gifford UK Growth (BGUK ) is planning to increase share buybacks in a bid to narrow its stubborn double-digit discount. 

It hopes the changes will deliver a single-digit discount to net asset value (NAV) and enable the shares to more accurately track the performance of the underlying portfolio. The £262m UK equity portfolio is run by Milena Mileva and Iain McCombie. 

The trust has already employed measures that were aimed at narrowing its persistently wide discount, currently at 10.3%. These included ongoing buybacks and the introduction of a one-off 100% performance-related tender offer in 2029, which would essentially wind-down the trust.

While the board has had some success in reducing the discount from a 12-month average of 14.3%, the shares have failed to recover despite a bounce back in performance.

The NAV of the fund increased 10%, including dividends, between 30 April and 31 December last year, well ahead of the FTSE All Share index’s return of 3.2%.

‘The board recognises that the company, despite being more active in buying back shares since the [September] annual general meeting, with a total of 6.7m shares – £11.9m – repurchased, continues to witness a share price discount which is wider than desired,’ said the board, which is chaired by Neil Rogers.

This follows a tough few years for the trust. The NAV is up just 5% over three years, which compares to a 23.7% rise by the FTSE All Share, making it one of the worst performing trusts in the AIC’s UK all companies sector. The shares have fallen 4.1% over the same period, delivering an extended period of pain for investors.

Baillie Gifford’s trusts have come under scrutiny after three were requisitioned by New York-based activist investor Saba Capital, which wants to oust the board and is understood to want to install itself as manager at Baillie Gifford US Growth (USA ), Edinburgh Worldwide (EWI ), and Keystone Positive Change (KPC ).

Boaz Weinstein, the boss of Saba Capital, has been highly critical of Baillie Gifford, which was the darling of the trust industry just a few years ago.