Half-year Report

RNS Number : 3759A

Baillie Gifford US Growth Trust PLC

21 January 2020

 

 RNS Announcement

Baillie Gifford US Growth Trust plc

Legal Entity Identifier: 213800UMIOUWXZPKE539

Regulated Information Classification: Half Yearly Financial Report

Results for six months to 30 November 2019

¾   Amazon, the Company's largest holding, saw an acceleration in its North American retail sales despite lacklustre US retail sales, as consumers continue to shift spending from offline to online.

¾   A new generation of companies, including Shopify and Stripe, are emerging with large potential opportunities.

¾   We ended November 2019 with 15 unlisted investments, representing approximately 14% of the Company's assets.

¾   We remain optimistic on the potential for technological progress to power sustainable increases in share prices.

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 £343.8 million (before deduction of loans of £13.9 million) as at 30 November 2019.

Baillie Gifford US Growth Trust is managed by Baillie Gifford & Co, the Edinburgh based fund management group with approximately £227 billion under management and advice in active equity and bond portfolios for clients in the UK and throughout the world (as at 20 January 2020).

The following is the unaudited Interim Financial Report for the six months to 30 November 2019 which was approved by the Board on 20 January 2020.

Responsibility statement

We confirm that to the best of our knowledge:

a)  the condensed set of Financial Statements has been prepared in accordance with FRS 104 'Interim Financial Reporting';

b)  the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months, their impact on the Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the year); and

c)  the Interim Financial Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

On behalf of the Board

Tom Burnet

Chairman

20 January 2020

Interim management report

We aim to identify and purchase the exceptional growth companies in America and hold on to them for long periods of time. In doing so, we hope to capture the upside inherent in their business models.

Investment Performance

During the period from 31 May 2019 to 30 November 2019, the Company's share price and NAV returned 7.2 per cent. and 7.5 per cent. respectively. This compares with a total return of 12.3 per cent. for the S&P 500 Index* (in sterling terms). During the period from 23 March 2018, launch date and first trade date, to 30 November 2019, the Company's share price and NAV returned 37.6 per cent. and 38.5 per cent. respectively. This compares with a total return of 37.3 per cent. for the S&P 500 Index* (in sterling terms). We have a long term approach, and would ask shareholders to judge performance over periods of five years or more.

Portfolio

We launched the Company in March 2018 because we believe there is a once in a generation opportunity to invest in the new leaders of the economy. We have often talked about how technological disruption is broadening out to sectors of the economy that have been hitherto immune.

Disruption is a process, not a technology, and it is only with significant time-lags that the fruits of technological revolutions can be repeated. We are still discovering the fruits of the internet/software/mobile revolution today. These technologies are the building blocks for new and disruptive models that rearrange business paradigms. Businesses that emerge from this revolution often serve consumers in different and better ways. Consequently, demand shifts from incumbents to a new generation of companies that can best harness these technologies. This means that growth can be, and often is, independent of economic growth. Nowhere is this more true than with Amazon, the Company's largest holding, where we saw an acceleration in Amazon's North American retail sales despite lacklustre US retail sales, as consumers continue to shift spending from offline to online.

In markets that are earlier in the adoption curve, the competitive landscape is still fluid. We witnessed this in the food ordering market where Grubhub, which had more than 50% market share only two years ago, is now growing more slowly in the face of competition from new entrants with different business models.

While Amazon, Alphabet and Microsoft have established themselves as the dominant companies of the current technological paradigm, we are encouraged by a new generation of companies that are emerging with equally large opportunities, establishing themselves at the platform layer. Shopify, one of the larger holdings, is one such company that is becoming the retail operating system upon which other businesses are built. Stripe, a new unquoted investment, is a company that is building the commercial infrastructure of the internet. In both these cases, the companies operate horizontally and globally, and have potential to become the economic fabric of the digital age. Their impact is only getting started and, should they be successful, will be felt for decades to come. 

In an era of great disruption, we must remain vigilant and open-minded. Disruptors can be disrupted, not only by other companies, but also by changing societal winds. For example, the rise in popularity of apps such as TikTok suggests that social media may be subject to generational shifts in preferences. We cannot always predict these shifts in advance but we aspire to back the companies which are adaptable and can respond to them.

Unlisted investments

The unlisted part of our portfolio continues to grow, despite two of our unlisted holdings, Slack and Peloton, coming to the public market during the period. We ended November 2019 with 15 unlisted investments, representing approximately 14% of the Company's assets, up from approximately 11% at the end of May 2019. These percentages will ebb and flow and we do not manage the portfolio to a certain percentage target in unlisted investments. We have been pleased by some of our new additions, and we believe our ability and willingness to invest in unlisted companies will be important to the Company's future returns.

Outlook

As we reflect on the previous decade and look towards the next, we remain optimistic on the potential for technological progress to power sustainable increases in share prices. We are moving from the exploration age into the deployment age where new markets and business models that were created in the past decade will grow and become the new normal. Technology will become ubiquitous and extend into all parts of society. We will no longer talk about "internet-enabled" businesses, no more than we talk about "electricity-enabled" businesses. This will become table-stakes and embedded in our expectations. The technology is maturing, but the opportunity is only beginning. As technology becomes ubiquitous, so will innovation itself. Innovation is the new normal.

The principal risks and uncertainties facing the Company are set out in note 11 below. The Board has specifically considered the market uncertainty arising from the UK's negotiations to leave the European Union and can see no scenario that it believes would affect the going concern status or viability of the Company.

* Source: Refinitiv and relevant underlying index providers. See disclaimer at the end of this announcement.

For a definition of terms see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Past performance is not a guide to future performance.

Income statement (unaudited)

	For the six months ended 30 November 2019			For the period 7 February 2018 to 30 November 2018			For the period 7 February 2018 31 May 2019 (audited)
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on sales of investments	-	8,133	8,133	-	758	758	-	3,003	3,003
Movement in investment holding gains	-	14,321	14,321	-	27,507	27,507	-	47,861	47,861
Currency gains	-	283	283	-	1,025	1,025	-	1,040	1,040
Income from investments and interest receivable	312	-	312	406	-	406	699	-	699
Investment management fee (note 3)	(981)	-	(981)	(1,048)	-	(1,048)	(1,893)	-	(1,893)
Other administrative expenses	(171)	-	(171)	(315)	-	(315)	(359)	-	(359)
Net return before finance costs and taxation	(840)	22,737	21,897	(957)	29,290	28,333	(1,553)	51,904	50,351
Finance costs of borrowings	(261)	-	(261)	(142)	-	(142)	(401)	-	(401)
Net return on ordinary activities before taxation	(1,101)	22,737	21,636	(1,099)	29,290	28,191	(1,954)	51,904	49,950
Tax on ordinary activities	(38)	-	(38)	(58)	-	(58)	(100)	-	(100)
Net return on ordinary activities after taxation	(1,139)	22,737	21,598	(1,157)	29,290	28,133	(2,054)	51,904	49,850
Net return per ordinary share (note 4)	(0.48p)	9.65p	9.17p	(0.69p)	17.52p	16.83p	(1.09p)	27.54p	26.45p

The total column of this Statement represents the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in this Statement derive from continuing operations.

A Statement of Comprehensive Income is not required as the Company does not have any other comprehensive income and the net return on ordinary activities after taxation is both the profit and comprehensive income for the period.

Balance sheet (unaudited)

	At 30 November 2019 £'000	At 31 May 2019 (audited) £'000
Fixed assets
Investments held at fair value through profit or loss (note 6)	337,015	296,434
Current assets
Debtors	98	51
Cash and cash equivalents	7,776	5,952
	7,874	6,003
Creditors
Amounts falling due within one year (note 7)	(14,957)	(12,508)
Net current liabilities	(7,083)	(6,505)
Net assets	329,932	289,929
Capital and reserves
Share capital	2,432	2,298
Share premium account	87,110	68,839
Special distributable reserve	168,942	168,942
Capital reserve	74,641	51,904
Revenue reserve	(3,193)	(2,054)
Shareholders' funds	329,932	289,929
Net asset value per ordinary share	135.69p	126.17p
Ordinary shares in issue	243,155,000	229,800,000

Statement of changes in equity (unaudited)

For the six months to 30 November 2019

	Redeemable preference shares £'000	Share capital £'000	Share premium account £'000	Special distributable reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 June 2019	-	2,298	68,839	168,942	51,904	(2,054)	289,929
Ordinary shares issued (note 8)	-	134	18,271	-	-	-	18,405
Net return on ordinary activities after taxation	-	-	-	-	22,737	(1,139)	21,598
Shareholders' funds at 30 November 2019	-	2,432	87,110	168,942	74,641	(3,193)	329,932

For the period from 7 February 2018 to 30 November 2018

	Redeemable preference shares £'000	Share capital £'000	Share premium account £'000	Special distributable reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 7 February 2018	-	-	-	-	-	-	-
Redeemable preference shares issued (note 8)	50	-	-	-	-	-	50
Ordinary shares issued (note 8)	-	2,186	224,017	-	-	-	226,203
Redemption of redeemable preference shares (note 8)	(50)	-	-	-	-	-	(50)
Cancellation of share premium (note 8)	-	-	(168,942)	168,942	-	-	-
Net return on ordinary activities after taxation	-	-	-	-	29,290	(1,157)	28,133
Shareholders' funds at 30 November 2018	-	2,186	55,075	168,942	29,290	(1,157)	254,336

* The capital reserves at 30 November 2019 includes investment holding gains of £62,182,000 (30 November 2018 - £27,507,000).

Cash flow statement (unaudited)

	For the six months to 30 November 2019	For the period from 7 February 2018 to 30 November 2018
	£'000	£'000
Cash flows from operating activities
Net return on ordinary activities before taxation	21,636	28,191
Net gains on investments	(22,454)	(28,265)
Currency gains	(283)	(1,025)
Finance costs of borrowings	261	142
Overseas withholding tax	(38)	(55)
Changes in debtors and creditors	29	267
Cash from operations*	(849)	(745)
Finance costs paid	(271)	(104)
Net cash outflow from operating activities	(1,120)	(849)
Cash flows from investing activities
Acquisitions of investments	(41,978)	(232,233)
Disposals of investments	24,219	4,729
Net cash outflow from investing activities	(17,759)	(227,504)
Cash flows from financing activities
Ordinary shares issued	18,405	226,203
Bank loans drawn down	26,298	5,380
Bank loans repaid	(23,963)	-
Net cash inflow from financing activities	20,740	231,583
Increase in cash and cash equivalents	1,861	3,230
Exchange movements	(37)	1,131
Cash and cash equivalents at start of period	5,952	-
Cash and cash equivalents at 30 November	7,776	4,361

*      Cash from operations includes dividends received in the period of £271,000 (30 November 2018 - £369,000) and interest received of £41,000 (30 November 2018 - £17,000).

List of investments as at 30 November 2019 (unaudited)

Name	Business	2019 Value £'000	2019 % of total Assets*
Amazon	Online retailer and cloud computing provider	25,982	7.6
Shopify Class A	Cloud-based commerce platform provider	15,743	4.6
Tesla	Electric cars, autonomous driving and solar energy	14,675	4.3
Netflix	Subscription service for TV shows and movies	13,759	3.9
Alphabet Class A	Online search and other online services	13,172	3.8
MarketAxess Holdings	Electronic bond trading platform	12,472	3.6
Mastercard Class A	Global electronic payments network	12,285	3.6
The Trade Desk	Advertising technology company	12,196	3.5
Illumina	Gene sequencing equipment and consumables	12,044	3.5
Facebook Class A	Social networking platform	11,943	3.5
Roku	Online media player	10,728	3.1
Novocure	Electric field based cancer therapies	10,234	3.0
First Republic Bank	Private banking	9,183	2.7
Wayfair	Online furniture and homeware retailer	8,271	2.4
CoStar Group	Commercial property information provider	6,839	2.0
ABIOMED	Manufacturer of heart pumps	6,566	1.9
Space Exploration    Technologies Series J   Preferred u	Rocket and spacecraft company	5,337	1.6
Space Exploration    Technologies Series K   Preferred u	Rocket and spacecraft company	1,216	0.3
		6,553	1.9
Chegg	Online education company	6,397	1.9
Watsco	Air conditioning, heating and refrigeration equipment distributor	6,337	1.8
Glaukos	Opthalmic medical technology company	5,799	1.6
Peloton Interactive	Connected fitness equipment	5,647	1.6
Grubhub	Online take-out ordering	5,585	1.6
Penumbra	Medical tools to treat vascular diseases	5,025	1.5
Alnylam Pharmaceuticals	Therapeutic gene silencing	4,492	1.3
Convoy Series D Preferred u	Marketplace for truckers and shippers	3,865	1.1
Redfin	Technology-based real estate brokerage firm	3,802	1.1
Stripe Series G Preferred u	Online payment platform	3,784	1.1
HEICO Class A	Aerospace parts	3,649	1.1
JAND (Warby Parker) Series   A Preferred u	Online and physical glasses retailer	1,885	0.5
JAND (Warby Parker) Series   C Preferred u	Online and physical glasses retailer	1,594	0.5
		3,479	1.0
Name	Business	2019 Value £'000	2019 % of total Assets*
RigUp Series D Preferred u	Jobs marketplace for the energy sector	3,479	1.0
Interactive Brokers Group	Online broker	3,458	1.0
Zipline International Series C   Preferred u	Drone-based medical delivery	3,431	1.0
Chewy	Online pet supplies retailer	3,388	1.0
Fortive	Diversified industrial company	3,373	1.0
Stitch Fix	Online clothing retailer	3,276	1.0
Ginkgo Bioworks Series E   Preferred u	Bioengineering company developing micro organisms that produce   various proteins	3,273	1.0
Away (JRSK) Series D    Preferred u	Travel and lifestyle brand	1,866	0.5
Away (JRSK) Series Seed    Preferred u	Travel and lifestyle brand	1,382	0.4
		3,248	0.9
NVIDIA	Graphics chips	3,187	0.9
Yext	Digital knowledge management	2,977	0.9
Thumbtack Class A u	Online directory service for local businesses	2,943	0.9
Tanium Class B u	Online security management	2,828	0.8
Zoom Video Communications	Remote conferencing service provider	2,782	0.8
Markel	Specialty insurer	2,647	0.8
Zillow Group Class A	US online real estate services	2,622	0.8
Appian	Enterprise software developer	2,585	0.8
New Relic	Cloud-based performance management software	2,505	0.8
Activision Blizzard	Videogame company	2,481	0.7
Niantic Series C Preferred u	Augmented reality games	2,415	0.7
Lyft	Ridesharing	2,398	0.7
Butterfly Network Series D   Preferred u	Portable ultrasound and diagnostics	2,353	0.7
Aurora Innovation Series B   Preferred u	Self-driving technology	2,319	0.7
Slack Technologies	Collaboration software	2,215	0.6
Denali Therapeutics	Clinical stage neurodegeneration company	2,099	0.6
Indigo Agriculture Series E   Preferred u	Agricultural technology company	2,059	0.6
Affirm Series F Preferred u	Consumer finance	1,160	0.3
Affirm Series A Preferred u	Consumer finance	731	0.2
		1,891	0.5
Moderna	Therapeutic messenger RNA	1,852	0.5
2U	Educational technology company	1,325	0.4
DistributionNOW	Oilfield drilling equipment distributor	1,100	0.3
Total Investments		337,015	98.0
Net Liquid Assets		6,832	2.0
Total Assets		343,847	100.0

* See Glossary of Terms and Alternative Performance Measures at the end of this announcement.

^u  Denotes unlisted security.

Distribution of total assets* (unaudited)

Sectoral Analysis

	As at 30 November 2019 %	As at 31 May 2019 %
Communication Services	12.7	12.9
Consumer Discretionary	27.1	26.1
Consumer Staples	0.6	0.8
Financials	9.7	10.6
Healthcare	14.6	15.1
Industrials	11.9	12.0
Information Technology	19.3	19.9
Materials	1.0	-
Real Estate	1.1	0.8
Net Liquid Assets	2.0	1.8
Total Assets	100.0	100.0

* See Glossary of Terms and Alternative Performance Measures at the end of this announcement.

	Listed equities %	Unlisted securities† %	Net liquid assets %	Total  assets %
30 November 2019	84.1	13.9	2.0	100.0
31 May 2019	87.4	10.8	1.8	100.0

Figures represent percentage of total assets.

^†Includes holdings in preference shares and ordinary shares.

Notes to the condensed financial statements (unaudited)

1.	The condensed Financial Statements for the six months to 30 November 2019 comprise the statements set out above together with the related notes below. They have been prepared in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended Practice issued in November 2014, updated in February 2018 with consequential amendments, and have not been audited or reviewed by the Auditor pursuant to the Auditing Practices Board Guidance on 'Review of Interim Financial Information'. The Financial Statements for the six months to 30 November 2019 have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements for the period from 7 February 2018 to 31 May 2019.
	Going Concern Having considered the nature of the Company's principal risks and uncertainties, as set out in note 11 below, together with its current position, investment objective and policy, its assets and liabilities, and projected income and expenditure, together with the Company's dividend policy, it is the Directors' opinion that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. The Company has continued to comply with the investment trust status requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements and confirm that they are not aware of any material uncertainties which may affect the Company's ability to continue to do so over a period of at least twelve months from the date of approval of these Financial Statements.
2.	The financial information contained within this Interim Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial information for the period from 7 February 2018 to 31 May 2019 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditor's Report on those accounts was not qualified, did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying the report, and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.
3.	The Company has appointed Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, as its Alternative Investment Fund Manager and Company Secretary. Baillie Gifford & Co Limited has delegated portfolio management services to Baillie Gifford & Co. Dealing activity and transaction reporting have been further sub-delegated to Baillie Gifford Overseas Limited. The Management Agreement can be terminated on six months' notice. The annual management fee is 0.70% on the first £100 million of net assets and 0.55% on the remaining net assets. Management fees are calculated and payable quarterly.
4.	For the six months to 30 November 2019 £'000 For the period from 7 February 2018 to 30 November 2018 £'000 For the period from 7 February 2018 to 31 May 2019 (audited) £'000 Net return per ordinary share Revenue return on ordinary activities after taxation (1,139) (1,157) (2,054) Capital return on ordinary activities after taxation 22,737  29,290  51,904  Total return 21,598 28,133 49,850  Weighted average number of ordinary shares in issue 235,496,148 167,070,439 188,466,423  Net return per ordinary share is based on the above totals of revenue and capital and the weighted average number of ordinary shares in issue during the period. There are no dilutive or potentially dilutive shares in issue.

Notes to the condensed financial statements (unaudited)

5.	No interim dividend has been declared. The Company's objective is to produce capital growth and the policy is only to distribute, by way of a final dividend, the minimum permissable to maintain investment trust status. It is not currently envisaged that any dividend will be paid in the foreseeable future.
6.	Fair Value Hierarchy The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows: Level 1 - using unadjusted quoted prices for identical instruments in an active market; Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and Level 3 - using inputs that are unobservable (for which market data is unavailable). An analysis of the Company's financial asset investments based on the fair value hierarchy described above is shown below. Investments held at fair value through profit or loss
	As at 30 November 2019	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
	Listed securities	289,095	-	-	289,095
	Unlisted ordinary shares	-	-	5,771	5,771
	Unlisted preference shares*	-	-	42,149	42,149
	Total financial asset   investments	289,095	-	47,920	337,015
	As at 31 May 2019	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
	Listed securities	263,914	-	-	263,914
	Unlisted ordinary shares	-	-	3,174	3,174
	Unlisted preference shares*	-	-	29,346	29,346
	Total financial asset   investments	263,914	-	32,520	296,434
	* The investments in preference shares are not classified as equity holdings as they include liquidation preference rights that determine the repayment (or multiple thereof) of the original investment in the event of a liquidation event such as a takeover.
	The valuation techniques used by the Company are explained in the accounting policies on pages 38 to 40 of the Annual Report and Financial Statements for the period from 7 February 2018 to 31 May 2019. Listed investments are categorised as Level 1 if they are valued using unadjusted quoted prices for identical instruments in an active market and as Level 2 if they do not meet all these criteria but are, nonetheless, valued using market data. The Company's holdings in unlisted investments are categorised as Level 3 as unobservable data is a significant input to their fair value measurements. During the period investments with a book cost of £4,666,000 (31 May 2019 - £2,286,000) were transferred from Level 3 to Level 1 on becoming listed.
7.	At 30 November 2019 creditors falling due within one year include borrowings of US$18,000,000 (sterling value £13,916,000), drawn down under a US$25,000,000 five year revolving credit facility  with ING Bank N.V., London Branch which expires on 1 August 2023 (31 May 2019 - US$15,000,000 (sterling value £11,901,000)).

Notes to the condensed financial statements (unaudited)

8.	30 November 2019 Number 30 November 2019 £'000 31 May 2019 Number 31 May 2019 £'000 Share capital Allotted, called up and fully paid ordinary shares of 1p each 243,155,000 2,432 229,800,000 2,298
	On incorporation, the share capital of the Company was £50,000.01 represented by one ordinary share with a nominal value of 1p and 5,000,000 redeemable preference shares with a nominal value of 1p, which were held by Baillie Gifford & Co Limited to allow the Company to commence business and to exercise its borrowing powers. The redeemable preference shares were to be redeemed upon completion of the Company's initial public offering ('IPO') out of the proceeds of the IPO. At its IPO on 23 March 2018, the Company issued 172,999,999 ordinary shares of 1p and raised gross proceeds of £173,000,000 which was used to finance the initial investments of the Company. The issue costs in respect of the IPO were £2,273,000, which were made up of set up costs of £453,000 and commission of £1,820,000. On 26 June 2018 the Company, by special resolution, redeemed the redeemable preference shares as confirmed by an Order of the High Court of Justice, Chancery Division. At that date, as approved by a special resolution passed on 5 March 2018, the amount outstanding on the Company's share premium account immediately following the issue on 23 March 2018 was reduced by £168,942,000 in order to create distributable reserves which could be used for the repurchase of shares and to fund the payment of dividends. The Company has authority to allot shares under section 551 of the Companies Act 2006. The Board has authorised use of this authority to issue new shares at a premium to net asset value in order to enhance the net asset value per share for existing shareholders and improve the liquidity of the Company's shares. In the six months to 30 November 2019, the Company issued a total of 13,355,000 shares (nominal value £133,550, representing 5.8% of the issued share capital at 31 May 2019) on a non pre-emptive basis at a premium to net asset value (on the basis of debt valued at par value), raising proceeds of £18,405,000 (in the period from the IPO, 23 March 2018 to 31 May 2019, the Company issued a total of 56,800,000 shares (nominal value £568,000, representing 32.8% of the issued share capital at 23 March 2018) raising proceeds of £69,597,000), which has been invested in accordance with the Company's investment policy. Over the period from 30 November 2019 to 20 January 2020 the Company has issued a further 5,430,000 shares at a premium to net asset value, raising proceeds of £7,514,000. The Company's authority to buy back shares up to a maximum of 14.99% of the Company's issued share capital was renewed at the Annual General Meeting held on 27 August 2019. No shares were bought back in the six months to 30 November 2019. At 30 November 2019 the Company had authority to buy back a further 34,941,690 ordinary shares.
9.	During the period the Company incurred transaction costs on purchases of investments of £7,000 (period 7 February 2018 to 30 November 2018 - £46,000;period 7 February 2018 to 31 May 2019 - £55,000) and transaction costs on sales of £8,000 (period 7 February 2018 to 30 November 2018 - £2,000; period 7 February 2018 to 31 May 2019 - £12,000).
10.	Related party transactions There have been no transactions with related parties during the first six months of the current financial year that have materially affected the financial position or the performance of the Company during that period and there are no changes in the related party transactions described in the last Annual Report and Financial Statements that could have had such an effect on the Company during that period.
11.	Principal risks and uncertainties The principal risks facing the Company are financial risk, investment strategy risk, discount risk, regulatory risk, custody and depositary risk, unlisted investments, operational risk, leverage risk and political and associated economic risk. An explanation of these risks and how they are managed is set out on page 5 of the Company's Annual Report and Financial Statements for the period from 7 February 2018 to 31 May 2019 which is available on the Company's website: www.bgusgrowthtrust.com. The principal risks and uncertainties have not changed since the date of that report.
12.	The Interim Financial Report will be available at www.bgusgrowthtrust.com‡ and will be posted to shareholders on or around 31 January 2020.

‡ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

Glossary of Terms and Alternative Performance Measures ('APM')
An alternative performance measure is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework.
Total Assets The total value of all assets held less all liabilities (other than liabilities in the form of borrowings).
Shareholders' Funds and Net Asset Value Shareholders' funds is the value of all assets held less all liabilities, with borrowings deducted at book cost. Net Asset Value ('NAV') is the value of all assets held less all liabilities, with borrowings deducted at either fair value or par value as described below. Per share amounts are calculated by dividing the relevant figure by the number of ordinary shares in issue.
Borrowings at Par Value (APM) Borrowings are valued at nominal par value (book cost).
Borrowings at Fair Value (APM) Borrowings are valued at an estimate of their market worth.
Net Liquid Assets Net liquid assets comprise current assets less current liabilities (excluding borrowings).
Discount/Premium (APM) As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, this situation is called a premium.
Total Return (APM) The total return is the return to shareholders after reinvesting the dividend on the date that the share price goes ex-dividend.
Ongoing Charges (APM) The total recurring expenses (excluding the Company's cost of dealing in investments and borrowing costs) incurred by the Company as a percentage of the average net asset value (with debt at fair value).
Gearing (APM) At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets. Potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds. Invested gearing is the Company's borrowings at par less cash and brokers' balances expressed as a percentage of shareholders' funds.
Glossary of Terms and Alternative Performance Measures ('APM') (Ctd) Leverage For the purposes of the Alternative Investment Fund Managers Directive, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.
Active Share (APM) Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

Third Party Data Provider Disclaimer

No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data. No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom.

No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.

Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.

S&P Index Data

The S&P 500 Index ('Index') is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates ('SPDJI'). Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC, a division of S&P Global ('S&P'); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ('Dow Jones'). Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.

Baillie Gifford US Growth Trust plc is a listed UK company. The value of its shares and any income from them can fall as well as rise and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares. Investment in investment trusts should be regarded as medium to long-term. The Company's risk could be increased by its investment in unlisted investments. These assets may be more difficult to sell, so changes in their prices may be greater. The Company is listed on the London Stock Exchange and is not authorised or regulated by the Financial Conduct Authority. You can find up to date performance information about Baillie Gifford US Growth Trust plc on the US Growth page of the Managers' website at www.bgusgrowthtrust.com‡

‡ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

21 January 2020

For further information please contact:

Alex Blake Baillie Gifford & Co

Tel [phone]

Mark Knight, Director, Four Communications

Tel [phone] or 07803 758810

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