Scottish money manager Baillie Gifford’s US growth fund has seen the value of its assets surge thanks to forward-looking bets on biotech, electric vehicles, and online payments and shopping.
The Baillie Gifford US Growth Trust (USA.L) said on Monday that the net asset value of its investments grew 53.8% in the six months to 30 November 2020. The trust made a pre-tax net return of £266m ($359.9m), or 98p per share.
The fund, which has around £810m of client money invested, was boosted by bets on companies including: Moderna (MRNA), which last year developed a COVID-19 vaccine; Tesla (TSLA), which saw its stock rally over 700% last year; and SpaceX, Elon Musk’s private space exploration development business.
Baillie Gifford has long been a backer of billionaire tech mogul Elon Musk. The money manager is the fourth largest investor in Tesla, which was the best performing US stock last year.
The US Growth Trust has held Moderna since it floated in 2018. Last year’s COVID-19 vaccine is the company’s first commercial product.
Management at Baillie Gifford highlighted Moderna, Telsa, and SpaceX in the US Growth Trust’s half year report but many of the fund’s holdings have performed well over the last year. Almost 6% of assets are invested in Zoom (ZM) and Netflix (NFLX), two platforms that have seen surging usage during the COVID-19 pandemic. The trust also has significant investments in online shops like Amazon (AMZN) and Wayfair (W), as well as payment businesses like Shopify and Stripe.
“It has been a year of great pain and loss,” Baillie Gifford management wrote in the US Growth Trust’s half-year report. “But there has also been some important progress. As we look forward, we are optimistic about what the future holds.
“As we have said many times before, the pace of innovation is speeding up and spreading out. This ought to be a fruitful environment for growth investors.”
The US Growth Trust was set up in 2018 to back both public and private high-growth companies in the US, with a focus on long-term investing. Performance largely tracked the S&P 500 until the start of 2020. While the US Growth Trust returned over 50% in the six months to the end of November, the S&P 500 returned 11.1% in sterling terms.
Shares in the US Growth Trust rallied 50% over the six months to the end of November. The stock was up 0.8% on Monday.
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