Baillie Gifford Emerging Markets Leading Companies Fund Factsheet
In plain words
This report covers a fund that invests in fast-growing emerging-market companies. It returned 68.7% over the past year, beating its benchmark. The fund stays almost fully invested and prefers high-growth firms with uncertain outcomes. Its top three holdings are all chipmakers: TSMC (9.9%), SK Hynix (9.8%) and Samsung Electronics (9.4%). It also underweights Taiwan and overweights Brazil. No explicit market outlook is given, but the positioning shows continued faith in tech and growth.
The Baillie Gifford Emerging Markets Leading Companies Fund report as of June 30, 2026 shows that the fund targets a five-year rolling outperformance versus the MSCI Emerging Markets Index, employs an active long-term growth equity strategy, and typically holds 35-60 stocks. The one-year return was
Performance Scorecard
Trailing one-year return of 68.7% beat the MSCI Emerging Markets Index (48.9%) and the IA sector average (46.6%); however, the five-year annualized return of 8.2% still lags the benchmark's 8.5%, and the five-year rolling target has not yet been achieved.
| Basis (Class B-Acc, GBP) | 6 months | 1 year | 3-year annualized | 5-year annualized |
|---|---|---|---|---|
| Fund | 42.3% | 68.7% | 23.6% | 8.2% |
| MSCI Emerging Markets Index | 25.7% | 48.9% | 21.8% | 8.5% |
| IA Global Emerging Markets sector average | 25.6% | 46.6% | 19.8% | 7.2% |
| Sector ranking | 4/181 | 8/178 | 33/166 | 55/155 |
| Annual period | Fund | Index | Sector average |
|---|---|---|---|
| 2021/06–2022/06 | -25.0% | -14.7% | -17.2% |
| 2022/06–2023/06 | 4.5% | -2.4% | -0.3% |
| 2023/06–2024/06 | 10.6% | 13.6% | 11.7% |
| 2024/06–2025/06 | 1.2% | 7.0% | 5.0% |
| 2025/06–2026/06 | 68.7% | 48.9% | 46.6% |
Discrete-period data show that the trailing 12 months (2025/06–2026/06) were the main source of outperformance, while the prior year (2024/06–2025/06) lagged the benchmark by 5.8 percentage points; the fund's objective is to beat the benchmark on a rolling five-year basis rather than in single-year rankings.
Fund Objective and Investment Positioning
The objective is to outperform the MSCI Emerging Markets Index on a rolling five-year basis, after costs and in GBP terms; the strategy maintains a long-term growth-stock style and explicitly accepts outcome uncertainty in exchange for high potential returns.
- Performance objective: outperform the MSCI Emerging Markets Index on a rolling five-year basis (after costs, in GBP); the author considers the IA Global Emerging Markets Sector another suitable reference. The report explicitly states that achievement is not guaranteed and that short-term actual returns may diverge from the objective.
- Portfolio strategy: active management, focusing on the larger, more liquid companies in emerging markets; a five-year holding-period perspective; a strong preference for growth stocks, based on the observation that "long-term returns in emerging markets follow earnings."
- Style positioning: the author states that, unlike most participants who prefer stable and predictable growth, the fund is willing to invest in companies with more uncertain outcomes but significant potential returns; typical holdings number 35–60.
- Note from the summarizer: this investment thesis is the fund's own self-promotional claim; readers should verify against the subsequent holdings and performance whether its stated willingness to bear uncertainty for high returns is genuinely implemented.
How the Manager Views the Market
[Not stated] The original text offers no judgment on the overall direction of emerging markets; from the strategy and structure, the author maintains a growth-stock preference and operates almost fully invested.
- The full text contains no commentary on valuation levels, macro paths, or short-term direction — only strategy-level statements: a belief that long-term returns are driven by earnings growth and a preference for high-growth companies with uncertain outcomes.
- Positioning clues: cash of only 0.1%, essentially fully invested; active share of 62% and annual turnover of 50%, reflecting a concentrated portfolio with medium-low turnover; no information disclosed on leverage, net exposure, or long/short adjustments.
Positioning: Top Holdings and Overweights/Underweights
As of end-June, the portfolio was highly concentrated in semiconductor and internet leaders: the top ten accounted for approximately 56.6% of assets; by sector, consumer discretionary (+5.3%) and industrials (+2.6%) were overweight, while information technology (-5.0%) was underweight; by region, Brazil (+6.7%) and Peru (+2.5%) were overweight, while Taiwan (-9.9%) and India (-4.9%) were underweight. The original text does not disclose details of new positions, adds, trims, or eliminations this period, and the direction of rebalancing is not indicated.
Top ten holdings:
| Name | % of assets |
|---|---|
| TSMC | 9.9% |
| SK Hynix | 9.8% |
| Samsung Electronics | 9.4% |
| Tencent | 6.4% |
| SK Square | 4.6% |
| MediaTek | 3.8% |
| Chroma ATE | 3.7% |
| First Quantum Minerals | 3.3% |
| Credicorp | 2.9% |
| MercadoLibre | 2.8% |
Sector distribution:
| Sector | Fund | Index | Difference |
|---|---|---|---|
| Information technology | 40.2% | 45.3% | -5.0% |
| Financials | 17.2% | 18.4% | -1.2% |
| Consumer discretionary | 12.5% | 7.2% | +5.3% |
| Industrials | 9.3% | 6.7% | +2.6% |
| Communication services | 7.2% | 6.0% | +1.2% |
| Materials | 6.4% | 5.4% | +1.0% |
| Energy | 3.2% | 3.1% | +0.1% |
| Consumer staples | 2.7% | 2.6% | 0.0% |
| Utilities | 1.2% | 1.9% | -0.7% |
| Cash | 0.1% | 0.0% | +0.1% |
| Total | 94.4% | 87.5% | — |
Regional distribution:
| Region | Fund | Index | Difference |
|---|---|---|---|
| South Korea | 25.5% | 23.7% | +1.8% |
| China | 21.1% | 19.0% | +2.1% |
| Taiwan | 17.5% | 27.3% | -9.9% |
| Brazil | 10.5% | 3.8% | +6.7% |
| India | 6.2% | 11.1% | -4.9% |
| Other emerging markets | 3.5% | 0.0% | +3.5% |
| Mexico | 3.0% | 1.7% | +1.4% |
| Peru | 2.9% | 0.4% | +2.5% |
| Vietnam | 2.1% | 0.0% | +2.1% |
| Chile | 2.1% | 0.4% | +1.7% |
The most striking regional features are the significant underweight to Taiwan (index weight 27.3% vs. fund at only 17.5%) and the more-than-double overweight to Brazil (10.5% vs. 3.8%); South Korea and China together account for 46.6%, forming the portfolio's regional core.
Fund Details
Fund size £817.53m, launched 10 May 2005, co-managed by three partners; B-class shares have an annual management fee of 0.72%, OCF of 0.78%, and historical yield of 0.59%.
- Management team: Will Sutcliffe, Roderick Snell, Alex Summers (all Partners).
- Operational metrics: 57 holdings (guidance 35–60), active share 62% (relative to the MSCI Emerging Markets Index), annual turnover 50%, structured as an OEIC.
- Share classes and fees: Class B-Acc (GB00B06HZN29) and Class B-Inc (GB00B06HZP43) both have annual management fees of 0.72%, OCF of 0.78%, and historical yields of 0.59%.
- Suitability statement: the fund describes itself as intended for investors seeking long-term capital growth who can tolerate short-term volatility; it does not offer capital protection.
From Product Risk to Sales Restrictions: Key Signals in Part Two
1. Risk Disclosures Are Not "Repetition" but Layered Disclosure
Although the risk language in this section reads like a standard fund template, a closer look reveals an internal layering logic:
| Risk layer | Key terms in the original | Practical meaning |
|---|---|---|
| General emerging-market systemic risk | market volatility, political and economic instability | Macro and political volatility |
| Extreme/market mechanism risk | market shutdown, trading, liquidity, settlement | Not an ordinary decline, but a mechanical risk of being unable to trade or settle |
| Company-level risk | corporate governance | Poor governance at portfolio companies could cause permanent value loss |
| Regulatory/tax risk | regulation, legislation, taxation | Legal and tax changes can alter the legality and real returns of an investment |
| Portfolio characteristic risk | concentrated portfolio relative to similar funds | More concentrated than comparable funds; short-term NAV volatility is amplified |
| Foreign currency risk | foreign currencies, rates of exchange | Exchange rates affect both principal and returns |
| Pricing risk | basis on which the Fund is priced | Changes in valuation methodology can affect the fund price, which may not equal the market price of the underlying assets |
Two points deserve special emphasis:
- "market shutdown" is a more severe risk than volatility. It means the market may be unable to open normally, or part of the trading mechanism may fail; in such cases, investors face not only losses but also the possibility of being unable to exit.
- "the basis on which the Fund is priced" indicates that the fund price may not be consistent with the last traded price. When emerging-market trading hours are misaligned, the fund may use fair value pricing or adjusted valuation methods, causing the fund price to deviate from what investors intuitively regard as the "market price."
2. The Core Logic of the Five Country Notices: Classify First, Then Sell
On the surface, this section is a collection of legal disclaimers; in reality, it is classifying investors. What the notices repeatedly emphasize is not "whether the fund is good," but "to whom it can be legally sold."
| Jurisdiction | Regulatory basis | Registration status | Target investors | Nature of offer/sale |
|---|---|---|---|---|
| Israel | Securities Law, 1968; Investment Advice Law | Registration status not explicitly stated in the original | Must qualify under at least one category in each of the two regimes: Sophisticated Investors + Qualified Clients | Targeted sale, not offered to the general public |
| Colombia | Registro Nacional de Valores y Emisores; Bolsa de Valores de Colombia | Not registered, and will not be registered in the future | No explicit qualified investor definition; no public offering or exchange trading permitted | Does not constitute a public offering; investors bear compliance responsibility themselves |
| Chile | CMF; Norma de Carácter General N° 336 | Not registered in the Registro de Valores or Registro de Valores Extranjeros | No specific category defined, but emphasizes it does not constitute a public offer, assessment, or recommendation | A private placement arrangement under the NCG 336 framework |
| Peru | SMV; Registro Público del Mercado de Valores | Not registered; relevant documents not submitted to or reviewed by the SMV | Institutional investors only | Private placement; non-institutional investors may not participate |
| Mexico | CNBV; National Registry of Securities | Not registered, and will not be registered in the future | Qualified and institutional investors | Private placement exemption under Article 8 of the Securities Market Law |
Several independent observations can be drawn from this comparison:
- Colombia is the only jurisdiction that explicitly requires investors to bear full compliance responsibility themselves. The original text states that the investor "is the sole liable party for full compliance," effectively shifting compliance risk from the fund manager to the investor. In contrast, Peru merely requires non-institutional investors to "refrain," while Mexico only lists the exemption basis.
- Israel's dual condition is stricter than the usual "qualified investor" test. It is not an either/or choice; rather, an investor must qualify under at least one category in each of the two regimes — Sophisticated Investors under securities law and Qualified Clients under investment advice law. This suggests the fund is circumventing sales-advice restrictions under investment advice law, not just public-offering restrictions under securities law.
- The Chilean notice is in Spanish, while the other four are in English. This suggests that local Chilean regulatory requirements are more stringent, and the notice was likely drafted by local counsel; the other jurisdictions rely on English-language documents, with the target clientele leaning toward international institutional investors.
- None of the five country notices mentions reverse solicitation. In other words, the fund cannot rely on the "investor initiated inquiry" exemption path. These notices are all premised on active targeted sales to qualified investors, not passive responses to inquiries.
3. Three Easily Overlooked Details
First, "This Factsheet, as well as investment in the Fund described herein" indicates that the restriction applies not only to this document but to the fund itself. Even if investors learn of the fund through other channels, as long as they are in these jurisdictions, the relevant sales restrictions still apply.
Second, the Colombia section uses "will not be registered" twice. This future tense indicates that this is not a temporary unregistered status but a deliberate decision not to enter the registration regime. Investors therefore cannot assume that "the fund is in the process of registering" as a basis for expecting future public trading.
Third, clause (v) of the Chilean notice specifically states, "Este material no constituye una evaluación o recomendación." This wording is uncommon in commercial documents. It attempts to block investors from later claiming, "I made my investment decision based on this document," as a remedy path. For Chilean investors, this Factsheet cannot be regarded as investment advice.
4. Practical Implications for Intermediaries and Investors
These country-specific notices should not be viewed as "skippable legal text" but rather as part of the conditions for sales access:
- Intermediary role: Before forwarding this document in Israel, Colombia, Peru, Mexico, and other countries, intermediaries must first confirm the investor category. This is not "providing information" but an act of "targeted selling."
- Institutional investor role: Even if investors fall into the institutional category, they must still assess local foreign-exchange, tax, securities registration, and other compliance obligations themselves. The fund does not make this determination on investors' behalf.
- Retail investor role: In these jurisdictions, the Fund's Factsheet is not prepared for retail investors. If retail investors subscribe, they may face risks of invalid subscription, inability to redeem, or penalties under local law.
5. Compliance Significance of Contact and Document Information
The contact information at the end is not a simple signature block:
- Intermediary Enquiries and Institutional Enquiries are set up separately, indicating that sales channels are deliberately segmented into "intermediary resale" and "direct institutional investment," with no general retail hotline.
- "Your call may be recorded for training or monitoring purposes" is a common call-recording disclosure under the UK financial conduct regulatory framework, and also indicates that the fund's management processes apply UK compliance standards.
- The KIID or Prospectus is available at bailliegifford.com, but no local representatives or paying agents in individual countries are listed. This echoes the five country notices: the fund does not intend to establish a public sales network in these jurisdictions.
- The Ref: 10064201 and copyright notice at the end further confirm that this is a controlled-distribution document and should not be forwarded on one's own initiative to investors who do not qualify.
Therefore, the real function of this section is: first define "who may buy," then discuss "what risks arise after buying." For institutional investors, the key is proving their qualifications; for intermediaries, the key is preserving compliance evidence; for retail investors, the most important judgment may be that "it was never meant to be sold to me."