Baillie Gifford European Fund Factsheet
In plain words
This fund factsheet shows a poor record: the portfolio lost 1.6% over the past year while its European benchmark rose 22.9%, and it has lagged for five straight years, ranking last in its peer group. The manager calls the fund a 'growth investor', buying firms with long-term sustainable growth potential, holding a concentrated portfolio and rarely tracking the index—so swings are large. Key holdings include ASML, a Dutch chip-equipment maker (about 10% of assets), plus Swiss pharma Roche and ASM International, another Dutch chip-equipment firm (about 5% each). In short, the fund is betting that a few expensive growth names will keep winning; so far, it hasn't paid off.
The Baillie Gifford European Fund report shows that the fund employs a bottom-up, long-term growth stock strategy, holding a concentrated portfolio of 45 European equities, with an active share of 76% and assets of £169.91m. As of June 30, 2026, performance significantly underperformed the benchmark
This Month's Scorecard
As of 30 June 2026, the fund returned -2.0% over six months and -1.6% over one year, versus +10.4% and +22.9% for the MSCI Europe ex UK benchmark over the same periods — excess returns of -12.4 and -24.5 percentage points, respectively; the five-year annualised return was -6.0% versus +10.5% for the benchmark, ranking last in its peer group (132/132).
| Measure | 6 months | 1 year | 3-year annualised | 5-year annualised |
|---|---|---|---|---|
| Fund Class B-Acc | -2.0% | -1.6% | 2.6% | -6.0% |
| MSCI Europe ex UK | 10.4% | 22.9% | 15.0% | 10.5% |
| Excess return | -12.4% | -24.5% | -12.4% | -16.5% |
| IA sector average | 8.9% | 17.7% | 12.8% | 8.2% |
| Peer ranking | 138/141 | 137/141 | 133/136 | 132/132 |
Discrete annual performance shows the fund underperforming its benchmark in five consecutive full financial years:
| Period | Fund | Index |
|---|---|---|
| 30/06/21-22 | -39.2% | -9.8% |
| 30/06/22-23 | 12.1% | 20.0% |
| 30/06/23-24 | 8.0% | 13.0% |
| 30/06/24-25 | 1.5% | 9.6% |
| 30/06/25-26 | -1.6% | 22.9% |
Holdings and Allocation
The report does not disclose attribution of individual holdings' contribution/detraction to returns or the direction of position changes, but it does list the top ten holdings and sector and country allocations in full: the portfolio is heavily overweight the Netherlands (25.3% vs 12.6%), Poland (7.9% vs 0.0%) and Sweden (13.4% vs 6.7%), and significantly underweight France (5.8% vs 19.5%) and Germany (8.6% vs 17.2%).
Top ten holdings (percentage of total assets):
| Holding | Weight |
|---|---|
| ASML | 9.7% |
| Roche | 5.0% |
| ASM International | 5.0% |
| DSV | 3.8% |
| Lonza | 3.5% |
| KBC Group | 3.1% |
| Ryanair | 3.1% |
| Avanza Bank | 2.9% |
| TotalEnergies | 2.5% |
| Kingspan Group | 2.5% |
Sector allocation:
| Sector | Fund | Index | Difference |
|---|---|---|---|
| Industrials | 22.8% | 20.7% | +2.1 |
| Financials | 21.4% | 23.7% | -2.3 |
| Information Technology | 15.9% | 12.7% | +3.2 |
| Health Care | 14.7% | 12.9% | +1.8 |
| Consumer Discretionary | 8.2% | 7.1% | +1.2 |
| Consumer Staples | 5.1% | 6.9% | -1.8 |
| Communication Services | 3.7% | 3.4% | +0.3 |
| Energy | 2.5% | 2.8% | -0.2 |
| Materials | 2.0% | 4.4% | -2.4 |
| Utilities | 1.9% | 4.9% | -3.1 |
| Cash | 1.8% | 0.0% | +1.8 |
Country allocation:
| Country | Fund | Index | Difference |
|---|---|---|---|
| Netherlands | 25.3% | 12.6% | +12.7 |
| Switzerland | 16.0% | 18.8% | -2.7 |
| Sweden | 13.4% | 6.7% | +6.6 |
| Germany | 8.6% | 17.2% | -8.6 |
| Poland | 7.9% | 0.0% | +7.9 |
| France | 5.8% | 19.5% | -13.7 |
| Ireland | 5.6% | 0.8% | +4.9 |
| Spain | 4.2% | 7.8% | -3.6 |
| Denmark | 3.8% | 3.3% | +0.4 |
| Belgium | 3.1% | 2.3% | +0.9 |
Portfolio characteristics: 45 holdings (guideline range 30–50), active share 76% (relative to MSCI Europe ex UK), annual turnover 44%, top ten holdings 41.1% in aggregate.
Fund Details
Fund size £169.91m; managed by Joe Faraday and Christopher Howarth; established on 17 June 1985; open-ended (OEIC) structure; performance benchmark MSCI Europe ex UK.
- Fund objective: to outperform the benchmark on a rolling five-year basis, in sterling terms, after fees; the manager regards the IA Europe Excluding UK Sector as an equally appropriate comparator. The document explicitly states that "there is no guarantee that the objective will be achieved over any time period, and actual returns may differ, particularly over the short term."
- Investment approach: a concentrated portfolio of European equities constructed with "little regard for the index", bottom-up stock selection and a holding period of more than five years. "We are growth investors and invest in companies that have the potential to grow sustainably over the long-term." Readers should note that this is the manager's own self-description, which stands in contrast to the fund's persistent and significant underperformance of its benchmark over the past five years.
- Fees and share classes: Class B-Acc (OCF 0.62%), Class B-Inc (OCF 0.61%); both carry an annual management fee of 0.55% and a historical yield of 0.50%.
This continuation follows the core thread of the "risk warnings" and "compliance statements" in the fund materials, but shifts the focus from investment risk itself to product structure risk and the legal boundaries of cross-border distribution. Although the two parts appear to stand side by side, together they form a complete chain of investor suitability management: the former reveals the sources of the fund's inherent volatility, while the latter specifies which investors may legally participate in which jurisdictions.
1. Reinforced Risk Warnings: From Market Risk to Product Structure Risk
The earlier text typically covers general risks such as market and liquidity risk; the three additional risks in this continuation have a stronger fund-specific character:
| Risk type | Specific wording | Deeper implication |
|---|---|---|
| Concentration risk | "A concentrated portfolio may cause significant short-term share price volatility" | The higher stock-level concentration relative to comparable funds means non-systematic risk is deliberately amplified, and short-term NAV volatility may far exceed that of the benchmark index |
| Currency risk | "Foreign exchange exposure causes the value of investments and income to fluctuate in both directions" | Holdings outside the eurozone (or foreign-currency assets denominated in euros) will introduce exchange gains and losses, and this risk cannot be fully eliminated through diversification |
| Pricing volatility risk | "Fluctuations in the prices of underlying holdings and changes in the fund's pricing basis" | The fund's NAV per share may itself experience additional volatility due to transaction timing, liquidity discounts or valuation adjustments |
These three points are logically interconnected: concentrated holdings increase sensitivity to price changes in individual assets, while cross-border investment adds a currency variable; together they amplify the non-linear swings in the NAV trajectory. Through the blunt statement that "you may not get back the amount you invested", the risk warning completes the final correction of investor expectations — this product is not a capital-protected savings substitute, but a high-volatility equity investment.
2. Multi-Jurisdiction Regulatory Compliance: A Regional Exemption Framework for Private Placements
The "Important Information" section immediately following the risk warnings contains the compliance statements governing the fund's offer to investors in specific countries. Each paragraph adopts a binary structure of "not registered + qualified investors/private placement exemption only", reflecting the differing regulatory approaches to non-public offerings across jurisdictions:
| Country | Regulator | Registration status | Applicable exemption / investor restrictions |
|---|---|---|---|
| Israel | Israeli Securities Law (1968) | Registration not mentioned | Dual status of "sophisticated investor" + "qualified client" |
| Colombia | National Registry of Securities and Issuers | Not registered | No public exchange listing or trading; investors must themselves comply with foreign exchange and tax regulations |
| Chile | Financial Market Commission (CMF) | Not entered on the securities register | Private placement under Official Circular No. 336; public disclosure requirements do not apply |
| Peru | Superintendence of the Securities Market (SMV) | Not registered | Private placement to institutional investors only; non-institutions must refrain |
| Mexico | National Banking and Securities Commission (CNBV) | Not registered | Private placement exemption under Article 8 of the Securities Market Law; qualified and institutional investors only |
A common logic underlies these statements:
1. Private-offering nature: All countries emphasise that the document does not constitute a public offer and has not been substantively reviewed by the local securities regulator; public advertising, exchange listing or offers to the general public are therefore prohibited.
2. Investor bears the compliance burden: The Colombian clause, for example, states that "investors must themselves ensure full compliance with local laws", shifting part of the compliance responsibility onto investors; the Chilean statement clarifies that unregistered securities are not subject to CMF oversight and that investors must assess the risks themselves.
3. Fragmented regional regulation: The five countries each operate independent exemption regimes, from Israel's dual statutory status and Mexico's Article 8 to Chile's general circular, reflecting the fact that a cross-border fund must have legal opinions drafted separately for each jurisdiction; a single template cannot cover the globe.
3. Closing the Loop from Compliance Text to Investor Services
The contact details and copyright information at the end of the document are not merely layout elements, but an extension of the compliance process:
- Segregated contact channels: The separation of "intermediary enquiries" and "institutional investor enquiries" implies that the fund's sales framework distinguishes distributors from direct investors, ensuring that participants at different levels receive matching disclosure documents.
- Call-recording notice: The notice that "calls may be recorded" is consistent with the UK Financial Conduct Authority's (FCA) record-keeping obligations for telephone marketing and client service, and also reminds investors that the fund is subject to the UK regulatory framework.
- Copyright protection: ©Baillie Gifford & Co 2026 and the reference number confirm that the document is the official version, preventing information distortion through unauthorised reproduction.
4. Concluding Observations
Although this continuation consists of risk warnings and compliance notes, it reflects the dual focus of a boutique fund management company in global distribution: internally, revealing the product's highly volatile nature with a high degree of transparency to avoid inappropriate sales; externally, using finely calibrated jurisdictional legal statements to achieve regulatory segregation for private placements. This combination of "risk language + legal language" is precisely the key tool such funds rely on to sustain their long-term reputations in an increasingly stringent regulatory environment — it is neither a simple disclaimer nor empty legal boilerplate, but an institutionalised expression that unifies investment risk and legal risk within an investor suitability framework. For the reader, what truly warrants caution is not the risk warnings themselves, but the potential for self-misjudgement arising from differences in "qualified investor" standards across jurisdictions.