Ballie Gifford US Growth Trust half-year report today talked up the progress at Moderna, one of the companies that has developed a Covid-19 vaccine and enjoyed a spectacular run on its share price as a result.
After a tough year for everyone, the Edinburgh-based investment trust spoke of entering 2021 “with light at the end of the tunnel”.
Shares in Moderna have risen by more than 500% in the last year as it has spearheaded the effort to find a vaccine. “Moderna’s success has not come easy,” notes Baillie Gifford, adding that work so far is only “the tip of the iceberg”. Moderna is the trust’s 33rd largest holding, making up 1.2% of the fund. Tesla ranks number one at 8.7%, with Shopify second with 6.4%. Other top ten holdings include Amazon, The Trade Desk, Wayfair, Roku, Netflix, Peloton, Appian and Alphabet.
Management note: “The company has been investing in its mRNA platform for over a decade. It has had to overcome challenges with drug stability, delivery, and expression. However, now that these challenges have been solved in coronavirus, the learnings ought to be transferrable to the next vaccine that Moderna develops. This does not guarantee success by any means, but it makes the chances higher. Once Moderna has a DNA sequence of a protein to work on, it can be up and running with clinical trials in a matter of weeks. We are moving from a world of spaghetti at the wall drug development to something more akin to industrial manufacturing.”
Baillie Gifford also discussed the rise in electric vehicles and the “breath-taking” innovation at SpaceX, a private investment. Space investment is a hot topic and growing corner of the market. Last week a number of stocks related to space exploration jumped on news ARK Investment Management is planning to a launch a sector ETF.
Baillie Gifford US Growth Trust seeks to invest predominantly in listed and unlisted US companies and to hold onto them for long periods of time, in order to produce long term capital growth. The company has total assets of £810.3 million (before deduction of loans of £18.7 million) as at Nov 30th 2020.
During the six months to Nov 30th 2020, the Trust’s share price and net asset value (after deducting borrowings at fair value) returned 50.8 per cent. and 53.8 per cent. respectively. This compares with a total return of 11.1 per cent for the S&P 500 index in sterling terms over the same period.
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