Saba: Gore Street holds firm as the battle for USA looms
Saba Capital suffered another setback in September. At Gore Street Energy Storage Fund’s (GSF’s) AGM on 16 September, shareholders rejected Saba’s resolutions to discontinue the company, with 55.97% of votes cast against and 44.03% in favour. Saba, GSF’s largest shareholder, held a c 20% disclosed interest around the time of the vote and has since increased its position to 21.2%. It had argued that a managed wind-down was the quickest route to value for a trust trading at a discount in the mid-30s. The board countered that this would weaken its hand with buyers and disrupt asset sales already under way. Although the resolutions failed, the narrow margin leaves the board with little room for complacency and delivery against its stated KPIs will be closely watched.
Attention now turns to Baillie Gifford US Growth Trust (USA), where Saba has built its disclosed interest to 29.9% and proposed three nominees for election at the AGM on 23 October. Saba says its nominees would push for a cash exit at or near NAV, yet USA’s board reports that Saba rejected proposals that, if pursued, would have provided Saba and any other shareholders with an opportunity to sell their holdings at c 99.75% of NAV. The board argues this shows that Saba is seeking control rather than liquidity. The performance backdrop is supportive: as at end-September, USA’s NAV total return in 2026 was 28.2%, versus 14.2% for the S&P 500 in sterling terms, while its shares were up 32.0%. With private investors holding c 22% of the trust through three of the major platforms alone, retail engagement could again prove decisive. Edinburgh Worldwide’s outgoing board attributed Saba’s success in replacing it at April’s AGM primarily to a material reduction in ownership and voting support from private-wealth and retail investors. Turnout is all the more important given that another New York hedge fund, Sessa Capital, has disclosed a 7.7% stake in USA and has yet to state its voting intentions. The proxy deadline is 1pm on 21 October, although deadlines for voting through platforms will be earlier and may be as early as 14 October.
Zipline: Another private holding takes flight
Two private holdings provided fresh valuation support to USA in the second half of September. Zipline, the US drone delivery company, is reported to be in talks over a c $1bn financing at a c $20bn valuation. If completed on those terms, this would represent c 2.6x the $7.6bn valuation established in its January funding round. Following valuation adjustments, Zipline’s weighting rose to 4.0% from 2.0% in USA and to 3.8% from 1.8% in Scottish Mortgage (SMT).
A further lift followed when both trusts marked up their holdings in Anthropic, which confidentially filed for an IPO in June. Reuters has since reported that a listing is not expected until after November’s US midterm elections, with a valuation of around $2tn under discussion, although both timing and valuation remain uncertain. Anthropic now accounts for 3.9% of SMT’s portfolio, up from 2.9% at end-August, and 9.0% of USA’s total assets, up from 6.8%. USA’s discount has narrowed from c 6% at end-August to c 4%, reducing the incremental uplift implied by Saba’s proposed cash exit at or near NAV.
Vietnam: Emerging market status confirmed
On 21 September, Vietnam formally joined FTSE Russell’s emerging market indices, reclassified from frontier to secondary emerging status after eight years on the watchlist. The upgrade follows reforms including the removal of pre-funding requirements for foreign investors. Inclusion will be phased through 2027, while the index provider estimates that it could ultimately attract up to $6bn of additional capital into Vietnamese equities.
The macroeconomic backdrop remains strong, with GDP growth of 8.2% in H126, the fastest in 15 years. Near-term flows are more mixed, with foreign investors still net sellers year to date – a reminder that index inclusion is a starting point rather than an endpoint. For London-listed specialists such as VinaCapital Vietnam Opportunity Fund (VOF) and VietNam Holding (VNH), broader international participation in Vietnamese equities could support liquidity and valuations across their underlying portfolios. Further market-access reforms could also strengthen Vietnam’s longer-term case for an MSCI upgrade, although the country is not currently under formal MSCI reclassification review.
