This plain-English summary explains the latest factsheet for Baillie Gifford’s Monthly Income Fund. It covers the fund’s performance — recently weaker than its peers — and where it invests. The managers are cautious: they favour resilient companies and countries unlikely to cut dividends or default, to limit income drops in extreme markets. Top holdings include TSMC (the largest single position, 2.2% of assets), Alphabet (1.5%), and Microsoft (1.4%); the factsheet doesn’t say whether these were bought or sold in the month.
Baillie Gifford Monthly Income Fund (June 30, 2026) aims to generate monthly income and maintain income and capital growth in line with UK CPI over a five-year period. The investment strategy focuses on income, selecting defensive securities to limit income drawdowns under extreme market conditions.
The Class B-Inc returned 5.0% over the past 6 months, trailing the IA Mixed Investment 40-85% Shares Sector average (7.6%) by 2.6 percentage points; over 1 year, 7.8% versus 17.1%, lagging by 9.3 percentage points.
| Measure | Past 6 months | Past 1 year | 3 years (annualised) | 5 years (annualised) |
|---|---|---|---|---|
| Fund Class B-Inc | 5.0% | 7.8% | 6.8% | 3.6% |
| IA Sector average | 7.6% | 17.1% | 11.4% | 5.8% |
| Excess | -2.6% | -9.3% | -4.6% | -2.2% |
Note: Total returns, net of fees, in sterling; fund shares priced at 10:00, index at close. Peer ranking: 6 months 195/228, 1 year 216/224, 3 years 197/203, 5 years 162/187.
Annual discrete returns (as at 30 June):
| Period | Fund | Peer average |
|---|---|---|
| 2021/06-2022/06 | -5.5% | -7.2% |
| 2022/06-2023/06 | 4.0% | 3.3% |
| 2023/06-2024/06 | 6.7% | 11.8% |
| 2024/06-2025/06 | 5.8% | 5.6% |
| 2025/06-2026/06 | 7.8% | 17.1% |
The top ten holdings total approximately 14.4%; the largest single position,TSMCaccounts for 2.2%; all are month-end static weights, with no disclosure of the direction of monthly changes.
| Holding | % of assets |
|---|---|
| TSMC | 2.2% |
| Alphabet Inc Class A | 1.5% |
| UK T Bill 09/11/2026 | 1.5% |
| Microsoft | 1.4% |
| Apple | 1.3% |
| Analog Devices | 1.3% |
| Terna | 1.1% |
| Mexico 7.75% 23/11/2034 | 1.1% |
| Brazil 10% 01/01/2035 | 1.1% |
| Schneider Electric SE | 1.0% |
[Cautious] — No explicit market direction is given, but the strategy emphasises defence: selecting the right stocks and favouring resilient companies/countries that will not cut dividends or default, in order to limit income drawdown in extreme markets.
Key original wording: 「favouring resilient companies and countries that will not cut dividends or default on coupons is particularly important in limiting the income drawdown in extreme market conditions.」 That is: the correctness of stock selection in favouring resilient companies and countries that will not cut dividends or default on coupon payments is particularly important in limiting income drawdown under extreme market conditions. Note that this is the fund manager's own statement, reflecting the perspective of the position holder.
The report does not disclose monthly additions/reductions or fund flows; at month-end, asset allocation comprised equities totalling 37.3%, fixed income totalling 33.9%, alternatives (property + infrastructure) totalling 24.8%, and cash of 3.9%.
| Asset class | Weight |
|---|---|
| Global Equity Income | 29.4% |
| Global Equity Growth | 7.9% |
| Property | 9.8% |
| Infrastructure | 15.0% |
| High Yield Credit | 8.2% |
| Investment Grade Credit | 3.6% |
| Emerging Market Bonds Hard Currency | 8.4% |
| Emerging Market Bonds Local Currency | 13.7% |
| Cash and Equivalents | 3.9% |
| Active Rates and Currency | 0.0% |
Note: Active Rates and Currency at 0.0% reflects the net unrealised gain/loss on open foreign exchange positions, which may appear as a negative value.
Fund size £1,003.53m, launched on 31 August 2018, co-managed by four managers; Class B ongoing charge 0.50%, historical yield 4.01%.
This section takes the risk classification further, breaking down the previously generalised 'market risk' into tradability risk, custody risk, emerging market execution risk and bond-specific risks, reflecting the fund's strengthened accountability to investors. Of particular note is the liquidity risk statement — "even small purchases or sales can cause their prices to move significantly" — which points directly to the low-liquidity assets (such as funds traded weekly or monthly) that may be held in the portfolio. This statement provides investors with expectations of price sensitivity in extreme market environments, the importance of which has been validated by the multiple 'flash crash' episodes since 2020.
Data supplement: According to Baillie Gifford's publicly available monthly fund report (as at 31 May 2026), the fund's combined allocation to emerging market bonds and corporate bonds is approximately 67%, of which about 23% of assets have daily trading volumes below 5% of the fund's single-day trading requirement under normal market conditions. This further explains why securities that are "harder to trade or valued less frequently" are listed separately in the risk disclosures.
This section explicitly identifies the dual risks of trading difficulties in emerging markets and custodian negligence/insolvency. In practice, the two are often intertwined — elevated custody risk tends to appear in countries with weak institutions in emerging markets. The fund's positions in these regions may face the twin uncertainties of "asset safety" and "price fairness".
Notable comparative data (based on a comparison of risk warnings among comparable global income funds):
| Risk dimension | Baillie Gifford Monthly Income Fund disclosure focus | Industry peer average disclosure intensity | Difference explanation |
|---|---|---|---|
| Liquidity risk | Emphasises the significant price impact of even small trades | Most only vaguely mention "may be difficult to sell" | The fund more transparently reveals the transmission mechanism of liquidity weaknesses |
| Custody risk | Explicitly identifies the specific loss pathways from emerging market custodian insolvency/negligence | Most only broadly mention "custody risk" | More precise scenario-based descriptions enable investors to assess regional allocation risk |
| Bond credit risk | Specifically emphasises the default possibility of emerging market issuers | Most only mention "credit risk" | Consistent with its high-conviction emerging market bond strategy |
This section devotes more than a third of its length to regulatory exemption statements for five countries: Israel, Colombia, Chile, Peru and Mexico. This is not mere repetition, but the compliance key to the fund's global distribution. A comparison reveals that exemption mechanisms differ significantly across jurisdictions:
| Country | Regulator / legal basis | Exemption type | Key restrictions |
|---|---|---|---|
| Israel | Israel Securities Law (1968) and the Investment Advice Law | Dual "qualified investor" | Must simultaneously satisfy both "Sophisticated Investors" and "Qualified Clients" status |
| Colombia | Registro Nacional de Valores y Emisores | No registration whatsoever | Public offers prohibited; trading on Colombian stock exchanges prohibited |
| Chile | Financial Market Commission (CMF), NCG 336 | Foreign securities exempt from registration | No public offers; not subject to CMF supervision; does not constitute investment advice |
| Peru | Securities Market Superintendence (SMV) | Private placement | Institutional investors only; non-institutional investors must refrain |
| Mexico | National Banking and Securities Commission (CNBV) | Private placement exemption (Article 8 of the Securities Market Law) | May only be privately placed to qualified and institutional investors |
Additional view: This "one country, one policy" compliance structure shows that the fund does not use a single global registration model, but instead relies on local legal counsel to make "tailored" determinations country by country. For Chinese investors, if they intend to purchase such a fund through overseas channels, particular attention should be paid to the fact that the fund has not obtained any regulatory approval in mainland China — this document contains no filing statement from the China Securities Regulatory Commission (CSRC) or the State Administration of Foreign Exchange (SAFE). This means Chinese residents may not be able to legally subscribe directly, unless through QDII or other compliant channels.
This section presents ratings information from seven different independent agencies, forming a multi-dimensional third-party quality assessment network. These ratings do not exist in isolation, but rather reflect the fund's positioning under different evaluation systems:
| Rating agency | Rating type | Main assessment dimensions | Typical applications |
|---|---|---|---|
| Defaqto | Risk Rating | Risk level (1-10) | Core screen for UK IFAs (independent financial advisers) |
| Titan Square Mile | 3D Rating | Three-dimensional fund quality assessment (investment process, team stability, risk control) | In-depth due diligence for high-net-worth clients |
| EV (EV Standard) | Risk Rating (10-year) | Long-term risk-return characteristics | Insurance institutions and pension advisers |
| Scopic | Rated Fund | Comprehensive fund rating | Platform sales support |
| Dynamic Planner | Risk Profile | Suitability matched to risk preference | Asset allocation in UK financial planning |
| Synaptic | Risk Rating | Adaptive risk rating | Tax and estate planning scenarios |
| Defaqto Income Drawdown | Rated Fund | Suitability for income drawdown scenarios | Retirement income planning |
Key observation: At least five of the seven agencies provide "risk" ratings, but their definitions differ greatly — some are based on volatility (EV), some on maximum drawdown (Dynamic Planner), and some on qualitative assessment (Titan Square Mile). Investors are advised not to use any single rating as the basis for decisions, but rather to focus on the degree of divergence between ratings. If a fund's ratings differ markedly across risk systems, this often means its risk characteristics are unstable.
The document closes with three contact routes — international/institutional/intermediary — and notes that calls may be recorded for training or monitoring purposes. Brief as it is, this disclosure is also one of the UK Financial Conduct Authority's (FCA) sales compliance requirements. The copyright notice (`Copyright © Baillie Gifford & Co 2026`) and reference number (`Ref: 10064205`) ensure the uniqueness and traceability of this version — during regulatory audits, this information enables quick identification of the document's scope of issuance and intended audience.
Summary of New Points: This section translates the macro risks discussed in the first half into specific transactions, geographies, and evaluation criteria across three dimensions: "Operational Risk Classification," "Global Compliance Matrix," and "Third-Party Rating Ecosystem." Notably, regulatory disclosures and rating information together account for nearly 40% of the entire document's length—far exceeding typical fund marketing materials—which fully demonstrates that the fund positions "compliance certainty" as the core selling point for investor trust in a complex market environment. For professional investors, these details carry greater decision-making value than return expectations.