RNS Announcement: USA Results
Baillie Gifford US Growth Trust plc (‘USA’)
Results for the year ended 31 May 2024
During the financial year to 31 May 2024, the Company’s share price and net asset value (‘NAV’ after deducting borrowings at fair value) returned 32.9% and 16.2% respectively. This compares with a total return of 24.8% for the S&P 500 Index* (in sterling terms).
– Turnover in the portfolio over the financial year was 14% which is consistent with our five year plus time horizon.
– As at 31 May 2024, we held 24 private company investments which collectively compromised 34.1% of total assets.
– Oddity listed during the period and one additional private company investment was made: the digital retirement account manager revolutionising the US market, Human Interest.
– Eight listed holdings were added to the portfolio: Block, Guardant Health, Inspire Medical Systems, Insulet, Meta Platforms, Samsara, Sprout Social and YETI Holdings.
– Chegg, Illumina, MarketAxess, Novocure, Redfin, Snap, Twilio, Warby Parker and Zoom Video Communications were sold during the period. Convoy ceased operations during the period and was written off.
– The US remains a fertile hunting ground for growth investors. Its companies are leading in new technological paradigms like AI, just as they led previous innovation waves such as the internet and mobile. Our aim is to identify the most exceptional amongst these companies and hold them for the long term, thereby capturing the unique upside that such companies offer.
Baillie Gifford US Growth Trust seeks to invest predominantly in listed and unlisted US companies which the Company believes have the potential to grow substantially faster than the average company, and to hold onto them for long periods of time, in order to produce long term capital growth. The Company has total assets of £683.2 million (before deduction of loans of £39.3 million) as at 31 May 2024.
Chair’s statement
I am pleased to report an improvement in performance during the financial year to 31 May 2024. The Company’s share price and net asset value, calculated by deducting borrowings at fair value, total returns were 32.9% and 16.2% respectively. This compares with a total return of 24.8% for the S&P 500 Index* (in sterling terms).
Over the period from 23 March 2018 (launch date and first trade date), the Company’s share price and net asset value, calculated by deducting borrowings at fair value, returned 91.4% and 121.2% respectively compared to a total return of 152.0% for the S&P 500 Index* (in sterling terms).
Further information about the Company’s portfolio performance is covered by our portfolio managers, Gary Robinson and Kirsty Gibson, in their Managers’ review.
Outlook
In our last report I allowed myself to imagine that peaking interest rates might see valuations begin to recover during 2024. Clearly the Board is delighted that we have seen an improvement in our share price and a narrowing of our discount over the intervening period. Perhaps more importantly though, we continue to believe that the seismic changes in technology that underpin many of the companies we are invested in will continue and accelerate. We are at an inflexion point where many verticals, from transportation to drug discovery to communications and many others, are all ripe for disruption and we firmly believe that the portfolio of businesses we own includes many that will deliver outsize returns to long-term investors.
* Source: LSEG and relevant underlying index providers.