Baillie Gifford UK Growth makes up ground – Baillie Gifford UK Growth has published results covering the year to the end of April 2020. The trust returned -12.5% over the period in NAV terms. However, this was much better than the All-Share Index, which lost 16.7%. The 4.2% outperformance erases the 2% underperformance in the previous year and suggests the trust is on the right track. The return to shareholders was -14.6%. The net revenue return per share for the year was 3.75p, versus 5.12p in 2019. A single dividend of 3.10p per share was declared in respect of this financial year.
Highlights:
- The notable contributors to the relative outperformance were: Genus (world leading animal genetics company); Boohoo.com (online fashion retailer); Just Eat Takeaway.com (operator of online and mobile market place for takeaway food); and, Ultra Electronics (aerospace and defence systems provider).
- Four new positions were initiated over the year (Farfetch, Creo Medical, Games Workshop and 4imprint) and four exited (Jupiter Fund Management, Ted Baker, M&G and Carnival). Annual turnover was 5.4% and no gearing was deployed during the period.
- The net revenue return for the year was 3.75p per share (2019: 5.12p). A final dividend of 3.10p per share is being recommended to give a total for the year of 3.10p (2019: 2.95p Final and 1.50p Interim). The dividend is now paid by way of a single final payment and is approximately the minimum permissible to maintain investment trust status.
- As a consequence of Covid-19, companies are in an extremely challenging operating environment. The portfolio in aggregate is comprised of holdings that are well capitalised and have lower than average debt compared to the rest of the market.
- Despite the opaque macro backdrop, the Board and Managers remain convinced that exceptional UK growth companies can exploit their competitive positions over the long-term and take advantage of the opportunities that follow severe economic dislocation.
[Baillie Gifford UK Growth is now entering its third year under the stewardship of Baillie Gifford and the initial underperformance has been erased. One of the two fund managers, Milena Mileva, is talking to James Carthew later about what the future holds for the fund.If you miss this, there’ll be an opportunity to listen back]