Shares in the Baillie Gifford US Growth (USA) investment trust gained 1.6% to 331p after it significantly outperformed its benchmark during the first half of its 2021 financial year.
The trust, which invests in listed and unlisted US companies, recorded a share price and net asset value (NAV) return 50.8% and 53.8% respectively in the six months to 30 November, well ahead of the 11.1% total return from its benchmark, the S&P 500.
Though as always Baillie Gifford stressed it has a long term approach and ‘would ask shareholders to judge performance over periods of five years or more.’
Since the fund launched in March 2018, its NAV return has more than doubled, which compares with the S&P 500 adding 56% over the same period.
The trust’s largest holdings at the end of the first half were Tesla, Shopify and Amazon, making up almost 22% of the portfolio.
MODERNA SUCCESS
Aside from well-documented holdings like Tesla and Amazon, another big contributor to performance has been biotech company Moderna, which alongside Pfizer and AstraZeneca (AZN) has been able to develop and successfully roll out a coronavirus vaccine.
Its shares have risen more than six-fold in the past year from around $21 to $129, and the firm has been held in the Baillie Gifford US Growth trust since its IPO in 2018.
The vaccine is Moderna’s first commercial product, and Baillie Gifford said its approval ‘has important read-across’ for Moderna’s drug development platform more broadly.
Highlighting Moderna’s mRNA technology, Baillie Gifford said ‘we may be entering a new era for drug development’ and added, ‘A cohort of biotechnology companies are emerging which are built upon foundational technologies which may be reusable across multiple diseases and disease categories. We think Moderna could be one such company.’
SPACE-X ‘INNOVATING AT BREATHTAKING PACE’
Baillie Gifford also highlighted privately-owned aerospace company SpaceX, one of Tesla founder Elon Musk’s other business ventures which designs, manufactures and launches advanced rockets and spacecraft. The company makes up 1.5% of the trust’s portfolio.
It said SpaceX has been ‘innovating at a breath-taking pace’, with 2020 being the year America sent astronauts to the International Space Station again, thanks to SpaceX’s Crew Dragon shuttle, the first time a company has sent astronauts into space, while the firm has also been rapidly developing its Starship rocket, the vehicle it hopes will take people back to the Moon and then on to Mars.
Going forward, Baillie Gifford said it’s optimistic on the outlook and that the pace of innovation is ‘speeding up and spreading out’, and as such added that ‘this ought to be a fruitful environment for growth investors.’
