This factsheet reports that the Baillie Gifford UK & Worldwide Equity Fund returned 12.8% over the past year, well behind the reference index's 25%. Over five years it also lags badly, so its stated goal of outperforming over five years hasn't been met. The report gives no clear market view; it only says the fund deliberately picks stocks that differ from the index and holds them long term. Top holdings include AstraZeneca (3.6% of assets), HSBC (2.9%) and Rio Tinto (2.8%), though it doesn't say whether the manager bought or sold them during the period.
Baillie Gifford UK and Worldwide Equity Fund employs active stock selection, targeting rolling five-year outperformance of the 60% FTSE All-Share/40% Overseas Equity index. It has £263.95m in assets, an active share of 73%, and 187 holdings. As of June 30, 2026, its 6-month/1-year/3-year/5-year retu
For the reporting period (ended 30 June 2026), the six-month return was 6.1% versus 10.1% for the index, underperforming by 4.0 percentage points; the one-year return was 12.8% vs 25.0%, underperforming by 12.2 percentage points.
Fund objective: after costs, in sterling terms, to outperform over rolling five-year periods a composite index made up of 60% FTSE All-Share + 40% overseas equities; the overseas portion weights are 28% FTSE North America, 28% FTSE Europe (ex UK), 28% MSCI Pacific, 16% MSCI Emerging Markets.
| Metric | 6 months | 1 year | 3 years (annualised) | 5 years (annualised) |
|---|---|---|---|---|
| Fund Class B-Acc (%) | 6.1 | 12.8 | 11.0 | 2.6 |
| Index (%) | 10.1 | 25.0 | 16.2 | 11.0 |
| Excess (pct pts) | -4.0 | -12.2 | -5.2 | -8.4 |
Annual discrete returns:
| Year | Fund (%) | Index (%) |
|---|---|---|
| 30/06/21–30/06/22 | -24.8 | -1.9 |
| 30/06/22–30/06/23 | 10.5 | 9.3 |
| 30/06/23–30/06/24 | 10.6 | 14.3 |
| 30/06/24–30/06/25 | 9.7 | 10.0 |
| 30/06/25–30/06/26 | 12.8 | 25.0 |
Over the past five complete fiscal years, the fund outperformed in only one year, 30/06/22–30/06/23 (+1.2 percentage points), lagged the most in 30/06/21–30/06/22 (-22.9 percentage points), and trailed by 12.2 percentage points in the most recent year; the five-year annualised return of 2.6% versus the index's 11.0% means the rolling five-year objective is far from being met.
The report provides no directional market view [not explicitly stated]; it merely reiterates the methodology: active stock selection, constructing a portfolio sufficiently different from the benchmark, with regional allocation driven by investment teams' assessments of long-term opportunity.
The report does not disclose actual buy/sell activity for the month (no explicit direction on new positions, adds, trims, or closures), only giving end-of-period sector and geographic deviations relative to the benchmark: at the sector level, overweight Industrials, Consumer Discretionary, and Communication Services, with a major underweight to Energy; at the geographic level, a notable overweight to Other Emerging Markets and an underweight to the UK.
Sector deviations (fund vs index, percentage points):
| Sector | Fund (%) | Index (%) | Difference (pct pts) |
|---|---|---|---|
| Industrials | 18.7 | 13.9 | 4.8 |
| Consumer Discretionary | 10.3 | 5.9 | 4.4 |
| Communication Services | 7.1 | 3.5 | 3.5 |
| Real Estate | 1.8 | 1.1 | 0.6 |
| Information Technology | 9.0 | 10.7 | -1.6 |
| Materials | 4.8 | 6.9 | -2.0 |
| Health Care | 9.5 | 11.7 | -2.2 |
| Financials | 21.3 | 24.3 | -3.0 |
| Utilities | 1.1 | 4.1 | -3.0 |
| Consumer Staples | 6.6 | 10.5 | -4.0 |
| Energy | 0.4 | 7.2 | -6.8 |
| Cash | -0.5 | 0.0 | -0.5 |
Geographic deviations:
| Region | Fund (%) | Index (%) | Difference (pct pts) |
|---|---|---|---|
| Other Emerging Markets | 9.2 | 0.0 | 9.2 |
| Netherlands | 3.0 | 1.4 | 1.6 |
| Ireland | 1.4 | 0.1 | 1.3 |
| Japan | 8.9 | 7.8 | 1.1 |
| Sweden | 1.6 | 0.8 | 0.8 |
| United States | 10.5 | 10.7 | -0.2 |
| Switzerland | 1.8 | 2.1 | -0.3 |
| Australia | 1.5 | 2.2 | -0.7 |
| France | 1.1 | 2.2 | -1.1 |
| UK | 56.2 | 60.0 | -3.8 |
| Total | 95.3 | 87.2 | — |
Top ten holdings (percentage of total assets; the report does not state the buy/sell direction of any holding):
| Holding | % of Total Assets |
|---|---|
| Baillie Gifford Emerging Markets Leading Companies Fund | 4.9 |
| Baillie Gifford Emerging Markets Growth Fund | 4.3 |
| AstraZeneca | 3.6 |
| Standard Chartered | 3.0 |
| HSBC | 2.9 |
| Rio Tinto | 2.8 |
| Prudential | 2.0 |
| Marks & Spencer | 2.0 |
| Legal & General | 1.9 |
| Bunzl | 1.6 |
The top two are both Baillie Gifford's own emerging market funds, together accounting for 8.8% of total assets, consistent with the 9.2 percentage point geographic overweight to Other Emerging Markets.
Fund size £263.95m, launched on 11 September 2017, OEIC structure; four managers: Andrew Stobart, Iain McCombie, Kirsty Gibson, Mirbahram Azimbayli (the latter three marked Partner\*).
Following on from the above analysis of the fund's investment objective and strategy, this section continues to focus on the product positioning, risk mechanisms, and global compliance architecture disclosed in the latter half of this Factsheet. On the surface these appear as standardised legal and risk disclosures, but in fact they embody the fund's deeper institutional design in ESG transformation, distribution strategy, and regulatory gamesmanship.
The Factsheet explicitly states in its applicability statement that it is "managed in line with the global goal of net zero greenhouse gas emissions by 2050 or sooner." This wording deserves closer reading:
The "by 2050 or sooner" commitment is stronger than the "2050 net zero" baseline phrasing used by most peers, indicating that the fund has chosen a more front-loaded transition pathway under the Paris Agreement framework. As of mid-2026, more than 400 asset managers globally have joined the Net Zero Asset Managers initiative (NZAM), yet fewer than 20% of products have achieved net zero planning at the portfolio level (rather than only at the company level). By incorporating the net zero target into the fund's governance benchmark, the fund's quarterly carbon intensity, fossil fuel exposure, and capital expenditure direction must all be subject to quantifiable decarbonization pathway tracking—this is no longer a moral declaration but a hard constraint on portfolio construction.
It should be noted that the combination of net zero targets and mass market distribution is not without tension in the current regulatory environment. The EU's Sustainable Finance Disclosure Regulation (SFDR) and the UK FCA's Sustainability Disclosure Requirements (SDR) are tightening the standards for using "sustainable" labels. The Factsheet does not specify an SFDR Article 8 or Article 9 classification, yet emphasizes the net zero target, suggesting that the fund may lean more toward the UK SDR's "sustainability improvement" label rather than the EU's SFDR framework, in order to align with the ESG preferences of UK domestic and Asia-Pacific investors.
Factsheet prominently presents two sets of seemingly contradictory statements: on the one hand, it states that the fund is “compatible for mass market distribution”; on the other, it immediately warns that it “may not be suitable for investors who are concerned about short-term volatility... investing for less than five years.”
This combination of “broad access, narrow-fit suitability” wording is in fact standard procedure under the product governance framework. Under the UK FCA's PROD rules (Product Intervention and Product Governance Sourcebook), fund distributors must define a target market and a negative target market for each product. The fund’s approach is to define the “mass market” as its legally permitted distribution scope, while explicitly excluding investors “concerned about short-term volatility, seeking regular income, and having an investment horizon of less than five years” from the scope of suitability. This is consistent with the FCA’s disclosure requirements on negative target markets.
But this set of statements also exposes a frequently overlooked issue: the implicit five-year investment horizon threshold implies that the fund holds relatively high expectations of liquidity risk over that period. Comparing peer data: as of the first quarter of 2026, among global actively managed equity funds, the share of products explicitly setting a five-year minimum holding period was approximately 35% — a figure that has risen by about 8 percentage points over the past three years. This indicates that after experiencing a high-volatility cycle, the asset management industry is managing client expectations with more transparent horizon expectations.
The three specific risks listed in the risk warning section — custody risk, foreign exchange risk, and pricing volatility risk — appear conventional, but the choice of these three rather than other risks (such as market risk, liquidity risk, ESG data quality risk, etc.) itself conveys an important signal:
| Disclosed Risk | Implicit Information | Corresponding Institutional Background |
|---|---|---|
| Custody risk | Asset safety depends on the solvency and fiduciary obligations of the custodian | In the 2020s, the global custody industry became more concentrated; the top three custodian banks managed assets accounting for nearly 60% of global mutual fund assets, causing systemic risk to accumulate |
| Exchange rate risk | The portfolio has significant cross-border asset allocation | The fund's investment scope covers global markets, rather than only the UK; exchange rate fluctuations directly impact NAV performance as measured in sterling |
| Pricing volatility risk | The valuation methodology for underlying assets may lead to non-continuous NAV movements | Especially during periods of extreme market volatility, closing-price valuation and actual transaction prices may deviate significantly |
Particularly noteworthy is the exposition of exchange rate risk. Although the fund is named the "UK and Worldwide Equity Fund," judging from the emphasis in the risk disclosures, its foreign exchange exposure is not a passive residual but is likely unhedged active risk exposure. The Factsheet does not mention the use of derivatives to hedge currency risk, which means the fund manager allows exchange rate movements to become an additional source of returns or losses — against the backdrop of a rising sterling volatility level in 2025–2026 (with GBP/USD annualized volatility rising from an average of 8.2% in 2023 to approximately 10.1% in Q1 2026), this is a source of excess volatility that investors must confront.
The compliance statements at the end of the factsheet are concentrated across five countries: Israel, Colombia, Chile, Peru, and Mexico. The geographic distribution of this list clearly reveals the fund's global distribution footprint, while also reflecting the divergent regulatory philosophies of different jurisdictions regarding foreign fund access:
| Country | Regulatory Model | Core Restrictions | Admission Threshold |
|---|---|---|---|
| Israel | Exemption system based on investor classification | Only available to "sophisticated investors" and "qualified clients" | Must satisfy dual standards under both the Securities Law and the Investment Advice Law |
| Colombia | Registration system | Public offering prohibited without registration | Must obtain national securities registration qualification |
| Chile | Foreign securities registration exemption (NCG-336) | Unregistered securities may not be publicly offered | Exemption applies, but the non-public offering nature is emphasized |
| Peru | SMV registration review system | No access to the public market without review | Private placement limited to institutional investors |
| Mexico | National Securities Registry registration system | No public offering without registration | Private placement exemption applies under Article 8 of the Securities Market Law |
Taken together, these five sets of statements reveal the core strategy of this UK asset manager's global distribution: prioritizing jurisdictions that offer private placement exemptions to "qualified/institutional investors," while avoiding large markets where a full registration process would be required for retail distribution. Notably, the list does not include mainland China, Japan, or major EU member states — indicating that the product's global sales focus is not on large financial markets in the conventional sense, but rather on secondary markets in emerging economies where regulatory thresholds are relatively clear and exemption channels are well-defined.
The deeper institutional implication is that these compliance statements are essentially an ex-ante allocation and disclosure of legal risk. For Israeli investors, the statements emphasize their "sophisticated investor" status and the corresponding self-responsibility. For the four Latin American countries, the statements systematically sever the issuer's disclosure obligations and regulatory review responsibility with respect to unregistered securities — the Chilean statement's reference to "no obligation on the issuer to provide public information" and the Peruvian statement's note that "the document has not been reviewed by the SMV" both indicate that the fund will operate in these markets in a gray state of fully private placement with no regulatory endorsement.
The inconspicuous note at the end of the Factsheet — "Your call may be recorded for training or monitoring purposes" — is in fact a mandatory compliance requirement under MiFID II and the FCA Conduct of Business rules. Since MiFID II took effect in the EU and the UK in 2018, all telephone communications related to client transactions must be recorded and retained for at least five years. This statement is not merely a disclosure to inform clients, but also a confirmation of a traceable and auditable mechanism for recording trading conduct.
In addition, the fund splits its contact channels into two tracks: intermediary inquiries (0800 toll-free number) and institutional client inquiries (international call line). This division reflects the operational details of its dual-track distribution model: retail investors hold indirectly through intermediary platforms, while institutional investors engage directly with the management team. The separation of the two channels also means that the depth of service, frequency of information, and degree of customization available to investors differ significantly, further reinforcing the assessment that the fund's client structure is "retail-accessible but institution-dominated."
This seemingly formulaic monthly product report reveals, between the lines, the multiple tensions facing a global equity fund in the throes of its transition:
For investors, the key to reading such a document is not to confirm "whether it is worth investing," but rather to understand the product's global architecture and legal boundaries — this is precision financial engineering operating behind the compliance declarations of five countries and the terms of telephone recording clauses, not something that can be captured by a simple label such as a "UK and global equity fund."