21st Jan 2020 09:13
(Alliance News) - Baillie Gifford US Growth Trust PLC on Tuesday said it underperformed its benchmark in the first half but is excited with its technology-heavy portfolio.
At November 30, Baillie Gifford US's NAV per share stood at 135.69 pence, 7.5% higher than the 126.17p seen six months earlier.
The trust's net assets rose 14% over the six months to GBP329.9 million from GBP289.9 million. Baillie Gifford US ended the interim period with 243.2 million shares in issue compared to 229.8 million at the beginning of the period - which explains the discrepancy.
Baillie Gifford US did not declare an interim dividend, as the trust only distributes final dividends.
The trust's benchmark, the S&P 500, grew 12.3% over the six months to November 30 - outperforming Baillie Gifford US's NAV return of 7.5%.
"We have a long term approach, and would ask shareholders to judge performance over periods of five years or more," the trust stressed.
Since the fund launched in March 2018, its NAV return is 39%, which compares with the S&P 500 adding 37% over the same period.
Baillie Gifford US continued: "We launched the company in March 2018 because we believe there is a once in a generation opportunity to invest in the new leaders of the economy. We have often talked about how technological disruption is broadening out to sectors of the economy that have been hitherto immune.
"In an era of great disruption, we must remain vigilant and open-minded. Disruptors can be disrupted, not only by other companies, but also by changing societal winds. For example, the rise in popularity of apps such as TikTok suggests that social media may be subject to generational shifts in preferences. We cannot always predict these shifts in advance but we aspire to back the companies which are adaptable and can respond to them."
The trust's largest holdings at the end of the first half was Amazon.com Inc, Shopify Inc, Tesla Inc, Netflix Inc and Google-parent Alphabet Inc Class A - making up just over 24% of its portfolio. The trust also holds 14% of its portfolio in unlisted investments, with Slack and Peloton the most notable.
Looking forward, Baillie Gifford US added: "As we reflect on the previous decade and look towards the next, we remain optimistic on the potential for technological progress to power sustainable increases in share prices. We are moving from the exploration age into the deployment age where new markets and business models that were created in the past decade will grow and become the new normal."
Shares in Baillie Gifford US were down 0.2% in London on Tuesday morning at 149.69 pence each.
By Paul McGowan; [email protected]
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Baillie Gifford US Growth Trust