Baillie Gifford Emerging Markets Growth Fund Factsheet
In plain words
This factsheet covers Baillie Gifford's emerging-markets growth fund, which invests in fast-growing but riskier economies like China, South Korea and Brazil. The fund gained 72% over the past year, but over five years it has barely beaten the index it tracks. The managers avoid short-term market calls and instead hold growth stocks for the long run, accepting big swings in value. Its top holdings include Samsung Electronics, SK Hynix and TSMC — all major players in the semiconductor industry — reflecting a bet on long-term chip demand.
The Baillie Gifford Emerging Markets Growth Fund report states that the fund targets outperforming the MSCI Emerging Markets Index by at least 2% annually on a rolling five-year basis, employing a long-term (5-year) active growth stock strategy with a portfolio typically holding 60–100 stocks. As of
This Month's Scorecard
As of 30 June 2026, the fund returned 37.8% over the past six months, 72.1% over the past year, 26.0% annualised over three years, and 8.6% annualised over five years; over the same periods, the MSCI Emerging Markets Index returned 25.7%, 48.9%, 21.8% and 8.5%, respectively. Measured over the disclosed five-year window, the fund outperformed the index by only 0.1 percentage points, below the target of at least 2% annual outperformance on a rolling five-year basis.
| Measure | Past 6 months | Past 1 year | 3 years (annualised) | 5 years (annualised) |
|---|---|---|---|---|
| Fund Class B-Acc (%) | 37.8 | 72.1 | 26.0 | 8.6 |
| MSCI Emerging Markets Index (%) | 25.7 | 48.9 | 21.8 | 8.5 |
| IA Global EM sector average (%) | 25.6 | 46.6 | 19.8 | 7.2 |
| Sector rank | 11/181 | 4/178 | 14/166 | 52/155 |
Discrete annual returns show that the large positive excess return in 2025-26 was the primary support for cumulative five-year performance, while the fund clearly underperformed the index in 2021-22 and 2024-25:
| Annual period | Fund (%) | Index (%) | Sector average (%) |
|---|---|---|---|
| 30/06/2021-30/06/2022 | -27.1 | -14.7 | -17.2 |
| 30/06/2022-30/06/2023 | 3.7 | -2.4 | -0.3 |
| 30/06/2023-30/06/2024 | 14.7 | 13.6 | 11.7 |
| 30/06/2024-30/06/2025 | 1.4 | 7.0 | 5.0 |
| 30/06/2025-30/06/2026 | 72.1 | 48.9 | 46.6 |
Note: Fund share returns are calculated using 10am prices; index returns are calculated using closing prices. All are total returns in sterling after fees.
How the Manager Views the Market
The report makes no statement on short-term market direction. The manager's strategic stance is to hold growth equities over the long term and to accept uncertainty in outcomes in exchange for high potential returns.
- The manager believes that long-term returns in emerging markets follow earnings growth, so the portfolio is built on a five-year investment horizon with a preference for growth companies.
- The manager explicitly runs counter to the consensus that "most participants prefer stable, predictable growth," and is willing to invest in companies with less certain outcomes but significantly higher potential returns.
- The portfolio typically holds 60-100 stocks; as of the period end it held 80, with an active share of 59% and annual turnover of 36%, reflecting a low-turnover, concentrated, long-term holding style.
- The manager summarises the style as "exchanging uncertainty for high potential returns," which also serves as a self-justification for a highly concentrated, high-volatility portfolio. Readers should note that this is the perspective of a position-holder.
How Positions Shifted
The report does not disclose details of new positions, additions, reductions, or closures during the period. The following shows period-end holdings and their sector and regional deviations relative to the benchmark. The top ten holdings are all period-end existing positions; no directions are indicated.
The top ten holdings account for approximately 55.4% of total assets:
| Holding | % of total assets |
|---|---|
| Samsung Electronics | 9.9 |
| SK Hynix | 9.8 |
| TSMC | 9.7 |
| MediaTek | 6.8 |
| Montage Technology | 4.9 |
| SK Square | 4.2 |
| Tencent | 3.8 |
| MercadoLibre | 2.3 |
| Accton Technology | 2.0 |
| Alibaba | 2.0 |
The report does not comment on these individual stocks, nor does it provide a buy or sell direction.
At the sector level, the portfolio is significantly overweight information technology, industrials, and consumer discretionary relative to the benchmark, and underweight financials:
| Sector | Fund (%) | Index (%) | Difference (pp) |
|---|---|---|---|
| Information Technology | 47.0 | 45.3 | +1.7 |
| Financials | 11.7 | 18.4 | -6.7 |
| Industrials | 10.7 | 6.7 | +3.9 |
| Consumer Discretionary | 10.2 | 7.2 | +3.0 |
| Materials | 6.0 | 5.4 | +0.6 |
| Energy | 4.7 | 3.1 | +1.6 |
| Communication Services | 4.6 | 6.0 | -1.4 |
| Consumer Staples | 2.0 | 2.6 | -0.6 |
| Real Estate | 1.3 | 1.0 | +0.3 |
| Utilities | 1.3 | 1.9 | -0.6 |
| Health Care | 0.7 | 2.4 | -1.7 |
| Total | 93.4 | 91.0 | - |
At the regional level, the portfolio is overweight South Korea, China, and Brazil, and underweight Taiwan and India:
| Region | Fund (%) | Index (%) | Difference (pp) |
|---|---|---|---|
| South Korea | 25.9 | 23.7 | +2.2 |
| China | 23.4 | 19.0 | +4.4 |
| Taiwan | 19.5 | 27.3 | -7.9 |
| Brazil | 9.1 | 3.8 | +5.3 |
| India | 6.8 | 11.1 | -4.3 |
| Mexico | 2.8 | 1.7 | +1.2 |
| Thailand | 1.5 | 1.0 | +0.5 |
| South Africa | 1.4 | 2.9 | -1.5 |
| Chile | 1.4 | 0.4 | +0.9 |
| Other Emerging Markets | 1.6 | 0.0 | +1.6 |
| Total | 93.4 | 91.0 | - |
The period-end cash balance was -0.3%. The report attributes this to timing differences between shareholder subscriptions/redemptions and unsettled trades, rather than active leverage. The report does not disclose long/short ratio or leverage data.
Fund Details
The fund has £665.20m in assets, was launched on 03 March 1997, and has an OEIC structure. The fund managers are Andrew Stobart / Mike Gush / Ben Durrant (Partner). The fund targets outperformance of the MSCI Emerging Markets Index by at least 2% per annum on a rolling five-year basis; the manager also considers the IA Global Emerging Markets sector an appropriate comparator.
| Item | Data |
|---|---|
| Fund size | £665.20m |
| Launch date | 03 March 1997 |
| Fund manager | Andrew Stobart / Mike Gush* / Ben Durrant |
| Structure | OEIC |
| IA sector classification | Global Emerging Markets |
| Number of holdings | 80 (guidance 60-100) |
| Active share | 59% (relative to MSCI Emerging Markets) |
| Annual turnover | 36% |
| Main share classes | Class B-Acc / Class B-Inc |
| Annual management fee | 0.72% |
| Ongoing Charges Figure | 0.80% |
| Historic yield | 0.69% |
The specific risks listed in the report include emerging market custody asset risk (losses may be incurred if the custodian becomes insolvent or fails in its duties). The fund does not offer capital protection; it is suitable for investors seeking capital growth who can tolerate volatility and have an investment horizon of more than five years, and is not suitable for investors seeking short-term returns or stable income.
4. The Multi-Layered Design of Risk Disclosure: From "Standard Disclosure" to "Structural Warning"
The risk warnings in this continuation appear to be routine, but their internal layered structure deserves deeper unpacking. Unlike most emerging market funds, which merely mention "emerging market risk" in general terms, this fund's risk disclosure presents a "three-layer progression" logical framework:
Layer 1: Regional macro risk (China-specific)
The text explicitly lists China on its own and specifically points to market shutdown risk, trading and settlement risk, and corporate governance and regulatory risk. This formulation is far more precise than comparable fund documents — for example, it does not use vague wording such as "may include," but directly states "which includes China." Given the weight of the Chinese market in the emerging market index (China's weight in the MSCI EM Index is approximately 25-30%), this risk warning effectively acknowledges China's systemic position in the portfolio.
Layer 2: Portfolio structural risk (centred on concentrated holdings)
The phrase "Concentrated portfolio relative to similar funds" does not simply flag risk; it is an active acknowledgment that the product design deviates from its peers. Baillie Gifford has consistently practised a high-conviction, concentrated investment strategy; its typical emerging market fund holds 50-80 stocks, while funds in the same category may hold 100-200. This disclosure implies that investors choosing this fund are essentially selecting "a more extreme return distribution" rather than "a smoother NAV curve."
Layer 3: Price formation mechanism risk
'the basis on which the Fund is priced' points to the fund's pricing mechanism. For an emerging market fund holding small-cap or less liquid securities, the effect of valuation methods (such as fair value adjustments or swing pricing mechanisms) on final subscription and redemption prices cannot be ignored. What is revealed here is the combined effect of valuation uncertainty and liquidity premium.
| Risk layer | Risk nature | Transmission path | Actual impact on investors |
|---|---|---|---|
| Macro-regional risk | Systematic risk | Politics → Market → NAV | Portfolio-wide drawdown |
| Concentrated holdings risk | Idiosyncratic risk | Stock → Portfolio → Share | Short-term NAV volatility |
| Pricing basis risk | Mechanism risk | Valuation → NAV → Subscription/redemption price | Widening bid-ask spread |
5. Cross-Jurisdictional Compliance Mirror: An Institutional Mapping of Global Private Placements
The largest part of the continuation — important information on five countries: Israel, Colombia, Chile, Peru, and Mexico — essentially constitutes a cross-section of a multi-jurisdictional private placement compliance template. After unpacking country by country, one can see that behind these disclosures lie differences in regulatory philosophy:
5.1 Israel: A Special Regulatory Structure with Dual Thresholds
The Israeli disclosure simultaneously invokes two laws — the Securities Law and the Investment Advice Law — and requires investors to simultaneously satisfy the two standards of "Sophisticated Investors" and "Qualified Clients." What is unusual about this dual certification system is that most jurisdictions require only a single investor classification. Israel's "two-track system" effectively creates a nested investor screening whose protection is stronger than in most developed markets.
5.2 The Four Latin American Countries: From "Registration Exemption" to "Declaration Exclusion"
| Country | Regulatory basis | Investor scope | Core legal consequences | Regulatory intensity |
|---|---|---|---|---|
| Colombia | National securities registry exemption | Not specifically limited | Investors bear their own foreign exchange/tax compliance responsibility | Medium |
| Chile | CMF NCG 336 | Not specifically limited | Does not constitute an investment recommendation or assessment | Low |
| Peru | SMV public registry exemption | Institutional investors only | Non-institutional investors prohibited from participating | High |
| Mexico | Securities Law Article 8 exemption | Qualified investors/institutions | Public offering prohibited | Medium-high |
Chile's disclosure is the most distinctive — a long Spanish-language statement repeatedly emphasises "unregistered," "unsupervised," and "no public information obligations." The solemnity of its wording is essentially a disclaimer-style compliance strategy: using exhaustive language to demonstrate to the regulator that it has fulfilled its duty to inform. Peru's wording is the strictest, directly prohibiting non-institutional investors from participating, reflecting the boundary of the highest protection standard.
The common feature of these four countries' statements is that they are not positive authorization but negative exclusion — the core logic is "we are not seeking registration, and therefore public sale is not permitted." For professional investors, this effectively means that if the fund were to obtain broad retail distribution in a country, it would have to undergo a separate local registration process; the current framework indicates that it has chosen the high-net-worth/institutional channel.
5.3 The Coordinates of Compliance Text: Why Do Five Different Countries Appear in the Same Document?
This is not a random arrangement, but a legal-geographic projection of the fund's domicile, the custodian's distribution network, and global intermediary channels. One notable detail is that the document simultaneously contains a combination of Chinese risk warnings (analysed in an earlier section), Israel's dual-law citations, and the four Latin American statements. This layout implies that the fund has substantive distribution channels in Asia, the Middle East, and Latin America, rather than merely pre-emptively guarding against potential future channels.
6. The Two-Tier Structure of the Rating System: The Complementary Logic of Independent and Commercial Ratings
6.1 Functional Differentiation between Morningstar Medalist Rating and RSM Ratings
The document presents two rating systems — Morningstar Medalist Rating™ (analyst-driven) and Rayner Spencer Mills Research Rated Fund. The core difference is not only that the rating agencies differ, but more importantly, there is a fundamental divergence in evaluation logic:
| Dimension | Morningstar Medalist Rating | RSM Research Rated |
|---|---|---|
| Rating driver | Analyst qualitative judgement + quantitative model | Independent research team assessment |
| Evaluation focus | Expected ability to generate future excess returns | Fund suitability in adviser distribution |
| Target users | End investors and asset allocators | Professional financial advisers and intermediaries |
| Update frequency | Monthly updates (based on data as of 31 May) | No fixed schedule |
| Data coverage | 100% | Not disclosed |
In Morningstar's Medalist Rating, "Analyst-Driven" means the rating relies on analysts' qualitative judgement of the fund manager, the process, and portfolio construction, rather than purely quantitative backtesting. The figure `Data Coverage 100%` indicates that the rating covers the fund's entire holdings (not based on a sample); this high coverage provides transparency guarantees for the rating conclusion.
6.2 The Tension between the "Point-in-Time" and "Permanent" Nature of Ratings
One noteworthy time detail: the rating date is 31 May 2026, while the factsheet itself is dated 30 June 2026. This means the rating data carries a one-month lag window. For a highly volatile emerging market fund, one month of market conditions (such as a major correction in the Chinese stock market) may already have weakened the timeliness of the rating conclusion. The text explicitly notes, "These ratings are designed for use by professional advisers and intermediaries as part of their advice process," which is itself a statement of the boundaries of use — the ratings serve the adviser's screening stage, not the investor's buy decision.
7. Organisational-Behaviour Signals in Contact Information
The document ends with separate email addresses for "Intermediary Enquiries" and "Institutional Enquiries." This seemingly minor organisational detail reveals BaIIlie Gifford's binary distribution strategy structure:
- Intermediary channel (phone 0800 917 2113): aimed at the UK's local financial adviser network, with telephone advice as the dominant service model
- Institutional channel (email Institutional.Enquiries@): aimed at large institutions such as sovereign funds, pension funds, and insurance capital, with email communication as the daily mode of interaction
The difference between the two reflects the traditional underpinnings of intermediary distribution in the UK mutual fund industry. Even as the wave of digitalisation sweeps the globe, for individual investors, reaching funds through independent financial advisers (IFAs) remains the core route. The telephone recording statement ("Your call may be recorded for training or monitoring purposes") is a standard practice under the UK Financial Conduct Authority (FCA) compliance framework, implying BaIIlie Gifford's emphasis on traceability of the sales process.
8. Integrated View: The Fund's "Persona" from Risk Text to Compliance File
Integrating this continuation with the earlier content restores the full picture of this fund document — it is not merely information disclosure but a multi-dimensional product dossier. Its information layers can be summarised as:
1. Investment persona layer: emerging market growth strategy, specialisation in China, and concentrated holdings (analysed earlier)
2. Risk dialogue layer: three-layer progressive risk disclosure that sets investor expectations
3. Legal boundary layer: five-country compliance statements delineating the reachable investor population
4. Quality endorsement layer: cross-validation through the dual rating system
5. Service entry layer: dual-channel contact mechanism
This structure itself is a standardised modernism of the asset management industry — without disclosing any core commercial secrets, it meets the broadest possible global regulatory compliance while conveying strategic confidence to potential investors. The truly "sexy" information in the document (strategy logic, holding details, performance attribution) is, on the contrary, the most concise, while legal and risk disclosures are the most verbose — precisely the inverted aesthetics of modern financial disclosure: compliance consumes a great deal of space, while investment philosophy can only be experienced between the lines.
For an analyst, the key to interpreting such a document lies not in "how the fund will perform," but in what kind of legal being the fund has chosen. These choices ultimately transmit into liquidity characteristics, redemption constraints, and investor experience. This dossier submitted by BaIIlie Gifford, which has more than 40 years of emerging market investment history, achieves a balance between compliance and information that has become an exemplary practice of well-executed industry documentation.