Baillie Gifford is one of the UK’s most established active investment managers, best known for taking long-term positions in growth companies, innovative businesses and emerging technologies.
Founded in Edinburgh in 1908, the firm has spent more than a century developing an investment philosophy centered on patience, bottom-up company research and identifying businesses capable of becoming substantially larger over time.
As of June 30, 2026, Baillie Gifford managed or advised approximately £197 billion across specialist equity, fixed-income and multi-asset portfolios. More than 60% of its assets under management were managed for clients outside the UK.
However, investors researching Baillie Gifford in 2026 should look beyond its reputation for successful growth investing. Performance varies significantly between funds. Some Asian and emerging-market strategies have delivered strong recent returns, while several prominent US and global growth funds remain behind their benchmarks over longer periods.
This guide explains Baillie Gifford’s investment strategy, funds, holdings, performance, ownership, private-company investments, ETFs, fees, regulation and risks in 2026.
Quick Answer
Baillie Gifford is an independent investment-management partnership headquartered in Edinburgh, Scotland.
The firm follows a primarily active, long-term investment approach. Its managers research individual companies and look for businesses they believe can achieve exceptional growth over many years.
Baillie Gifford reported £197 billion managed or advised as of June 30, 2026. The company remains privately owned by its partners rather than outside shareholders.
Its best-known products include global and regional equity funds, investment trusts such as Scottish Mortgage Investment Trust, multi-asset strategies, private-company investments and, since 2026, a range of active US ETFs.
Key Takeaways
- Baillie Gifford was founded in Edinburgh in 1908.
- It remains privately owned by its working partners.
- It managed or advised approximately £197 billion as of June 30, 2026.
- The firm focuses heavily on long-term, active stock selection.
- Many portfolios deliberately differ significantly from their benchmarks.
- Growth companies, technology, emerging markets and private businesses are important areas of investment.
- Baillie Gifford reported more than $11 billion invested across 172 private companies as of June 30, 2026.
- Performance differs substantially between individual Baillie Gifford funds.
- The firm launched five actively managed US ETFs during 2026.
- Relevant UK Baillie Gifford entities are regulated by the Financial Conduct Authority.
What Is Baillie Gifford?
Baillie Gifford & Co is a global investment manager headquartered in Edinburgh, Scotland. Its history dates to 1908, when Augustus Baillie and Carlyle Gifford established their partnership.
Today, the firm manages specialist equity, fixed-income and multi-asset portfolios for institutional investors, pension funds, charities, intermediaries and individual investors around the world.
As of June 30, 2026, the company reported approximately £197 billion in assets managed or advised, with more than 60% managed for clients outside the UK.
For investors researching Baillie Gifford, its private partnership structure, long-term investment philosophy and global investment reach are important characteristics that distinguish the firm from many publicly listed asset managers.
Baillie Gifford at a Glance
| Metric | 2026 Information |
|---|---|
| Founded | 1908 |
| Headquarters | Edinburgh, Scotland |
| Ownership | Private partnership |
| Assets managed or advised | £197 billion |
| Partners | 54 |
| Core approach | Active, long-term investing |
| Main areas | Equities, fixed income, multi-asset and private growth |
| Major markets | UK, US, global, Japan, Asia and emerging markets |
The firm reported 54 partners as of April 2026, with an average tenure of more than 20 years.
Who Owns Baillie Gifford?
Baillie Gifford is unusual among major asset managers because it does not have external shareholders.
The business is privately owned by its partners, who also work within the firm.
Baillie Gifford argues that this structure allows management to concentrate on long-term investment decisions without pressure from outside shareholders focused on quarterly earnings or short-term corporate targets.
As of April 2026, Baillie Gifford had 54 partners.
Who Is the CEO of Baillie Gifford?
Tim Campbell became managing partner and chief executive in April 2025.
He joined Baillie Gifford in 1999 and became a partner in 2012.
The firm’s leadership is shared between three managing partners:
- Tim Campbell
- Malcolm MacColl
- Amy Atack
Malcolm MacColl has overall oversight of the investment departments, while Amy Atack became the firm’s third managing partner in April 2024.
How Does the Baillie Gifford Investment Strategy Work?
The Baillie Gifford investment strategy is built around finding companies that could grow significantly over the long term. Instead of closely following a market index, its managers choose individual businesses based on their own research.
The focus is not on predicting what a stock might do next month. Managers look at where a business could be five or ten years from now and whether it has the potential to become much larger.
Long-Term Investing
Long-term investing is a major part of how Baillie Gifford manages money.
Managers may continue holding a company during short-term market weakness if they believe its business, competitive position and future growth prospects remain strong.
This gives Baillie Gifford more time for a successful investment idea to develop instead of making decisions mainly because of short-term share-price movements.
Bottom-Up Research
The firm relies heavily on research into individual companies.
Before investing, teams may examine:
- management quality
- market opportunity
- competitive advantages
- financial strength
- innovation
- company culture
- customer growth
- ability to expand
- long-term revenue potential
The aim is to understand the business itself and determine whether it has the qualities needed to grow over many years.
Focus on Exceptional Companies
Baillie Gifford does not expect every investment to become a major winner.
Instead, managers look for a smaller number of exceptional companies that could create substantial value over time. A highly successful holding can potentially grow several times in value and have a large impact on overall portfolio returns.
This also explains why the strategy can be volatile. Companies expected to grow quickly can fall sharply when their growth slows or investors become less optimistic about their future.
Concentrated Portfolios
Some Baillie Gifford funds hold relatively small numbers of companies compared with broad market indexes.
For example, the Baillie Gifford American Fund had 51 holdings as of August 31, 2026, with active share of 77%.
Concentration means a successful company can have a meaningful positive impact on the fund. However, a sharp decline in one of its largest holdings can also have a greater negative effect.
Will Baillie Gifford Follow the Market?
Not necessarily.
Managers are willing to build portfolios that look very different from their benchmarks.
For example, the Long Term Global Growth Investment Fund had 48.5% invested in US companies as of August 31, 2026, compared with 63.6% for its comparative index.
China accounted for 13.7% of the fund, compared with only 2.4% of the index.
These differences matter because Baillie Gifford funds can perform very differently from the wider market. They may outperform substantially when their stock selections work, but they can also remain behind their benchmarks for long periods.
Baillie Gifford ESG and Responsible Investment
Baillie Gifford incorporates environmental, social and governance considerations into parts of its investment research, although investors should not assume that every Baillie Gifford fund is an ESG fund.
The firm’s general philosophy focuses primarily on identifying financially material issues that could affect a company’s long-term prospects.
Baillie Gifford also engages with companies and conducts proxy-voting activities as part of its stewardship responsibilities.
Some strategies, such as the Positive Change Fund, apply more explicit social or environmental objectives.
Investors should therefore examine each fund individually rather than assuming that one responsible-investment policy applies identically across the entire range.
What Funds Does Baillie Gifford Offer?
Baillie Gifford’s UK information states that the firm manages 11 investment trusts and 32 OEIC funds marketed to UK investors.
The investment range covers global equities, US stocks, Japan, Asia-Pacific markets, emerging markets, bonds, sustainable investing and diversified multi-asset strategies. This gives investors access to different markets and investment themes while following the broader Baillie Gifford approach to active management.
Some of the firm’s most frequently researched funds and investment trusts include:
| Fund | Main Focus |
|---|---|
| Baillie Gifford American Fund | US growth equities |
| Long Term Global Growth Investment Fund | Concentrated global growth |
| Positive Change Fund | Global growth with positive-impact objectives |
| Emerging Markets Growth Fund | Emerging-market equities |
| Pacific Fund | Asia-Pacific excluding Japan |
| Japanese Fund | Japanese equities |
| Scottish Mortgage Investment Trust | Global public and private growth companies |
Baillie Gifford OEIC vs Investment Trust
Baillie Gifford offers both open-ended investment company (OEIC) funds and listed investment trusts. Although both can provide access to professionally managed portfolios, they work differently.
Understanding these differences can help readers compare Baillie Gifford investment options, particularly when looking at OEIC funds alongside investment trusts such as Scottish Mortgage.
| Feature | OEIC | Investment Trust |
|---|---|---|
| Structure | Open-ended fund | Listed closed-ended company |
| Trading | Bought or sold through a fund provider or platform | Shares trade on a stock exchange |
| Shares | Created or cancelled as money enters or leaves | Existing shares are normally traded between investors |
| Discount or premium | Not normally applicable in the same way | Share price can trade above or below NAV |
| Gearing | Depends on the fund and its mandate | Can potentially borrow to invest |
| Price drivers | Mainly underlying portfolio value | Portfolio value plus market supply and demand |
One important difference is that an investment trust’s share price can trade at a discount or premium to its net asset value (NAV). Investment trusts may also use gearing, which can increase both potential gains and losses.
These structural differences mean an OEIC and an investment trust following similar investment themes can still produce different investor experiences.
Baillie Gifford American Fund
The Baillie Gifford American Fund is one of the firm’s best-known US growth strategies. Its objective is to outperform the S&P 500 over rolling five-year periods after costs.
As of August 31, 2026, the fund had:
- Fund size: approximately £1.94 billion
- Number of holdings: 51
- Active share: 77%
- Annual turnover: 39%
The fund focuses heavily on innovative US companies with the potential for long-term growth. Its portfolio includes businesses exposed to artificial intelligence, cloud computing, ecommerce, digital advertising and software.
Because the portfolio is actively managed and relatively concentrated, its performance can differ significantly from the S&P 500. This makes the fund’s individual stock selection particularly important to long-term results.
Baillie Gifford Long Term Global Growth Fund
The Long Term Global Growth Investment Fund (LTGG) is another concentrated growth strategy managed by Baillie Gifford. Unlike the American Fund, it invests across global markets rather than focusing primarily on US companies.
As of August 31, 2026, its largest holdings included:
| Holding | Portfolio Weight |
|---|---|
| NVIDIA | 7.6% |
| Amazon | 7.5% |
| ASML | 6.9% |
| TSMC | 6.5% |
| Cloudflare | 5.5% |
| CATL | 3.7% |
| Spotify | 3.2% |
| Samsara | 3.1% |
| Tencent | 3.1% |
| Nu Holdings | 3.1% |
Information technology represented 34.4% of the portfolio, while consumer discretionary companies accounted for 24.7%.
The portfolio differs considerably from a conventional global index. Its geographic and company allocations reflect Baillie Gifford’s willingness to invest according to its own long-term convictions rather than closely following benchmark weights.
This approach can provide exposure to high-growth opportunities across the US, Europe and Asia, but it can also lead to significant periods of underperformance when major holdings or growth stocks fall out of favour.
Baillie Gifford Emerging Markets Growth Fund
The Baillie Gifford Emerging Markets Growth Fund has been one of the firm’s stronger recent performers.
For the year ending August 31, 2026, the fund returned 54.1%, compared with 38.9% for its benchmark.
Its longer-term performance was:
- 1-year return: 54.1% vs 38.9% benchmark
- 3-year annualized return: 24.0% vs 21.0% benchmark
- 5-year annualized return: 9.0% vs 9.0% benchmark
The figures show strong recent performance, although the five-year annualized return was in line with the benchmark.
Emerging-market investing can also involve additional risks, including political uncertainty, currency movements, lower liquidity, regulatory changes and corporate-governance issues.
Baillie Gifford Pacific Fund
The Baillie Gifford Pacific Fund invests primarily in companies across Asia-Pacific markets excluding Japan.
For the year ending August 31, 2026, the fund returned 58.8%, compared with 40.1% for the MSCI AC Asia ex Japan Index.
Its performance over different periods was:
- 1-year return: 58.8% vs 40.1% benchmark
- 3-year annualized return: 26.2% vs 22.3% benchmark
- 5-year annualized return: 9.1% vs 9.3% benchmark
The difference between the one-year and five-year figures shows why recent performance should not be viewed in isolation. A fund can outperform strongly over a short period while producing results much closer to its benchmark over a longer period.
Baillie Gifford Japanese Fund
The Baillie Gifford Japanese Fund has a long track record, having launched on October 8, 1984.
As of August 31, 2026, the fund had:
- Fund size: approximately £1.09 billion
- Number of holdings: 63
- Active share: 81%
- Annual turnover: 20%
Its largest holdings included Sumitomo Mitsui Trust, SoftBank Group, Recruit Holdings, Sony and SBI Holdings.
For the year ending August 31, 2026, the Japanese Fund returned 18.5%, compared with 26.5% for TOPIX.
The fund’s high active share shows that its portfolio differs substantially from the benchmark, so periods of both outperformance and underperformance are possible.
Scottish Mortgage Investment Trust
Scottish Mortgage Investment Trust is one of the best-known investments managed by Baillie Gifford. Despite its name, Scottish Mortgage is not a mortgage lender. It is a global investment trust that has been managed by Baillie Gifford since its formation in 1909.
The trust invests in both publicly traded and private growth companies, giving investors exposure to businesses across different countries, industries and stages of development.
As of August 31, 2026, key figures included:
| Metric | Scottish Mortgage |
|---|---|
| Total assets | £17.75 billion |
| Shareholders’ funds | £17.14 billion |
| Active share | 87% |
| Launch year | 1909 |
| Benchmark | FTSE All-World Index |
Its high active share reflects a portfolio that can look significantly different from the benchmark. Like other actively managed Baillie Gifford strategies, performance therefore depends heavily on individual company selection.
Scottish Mortgage Discount to NAV
Because Scottish Mortgage is an investment trust, its market share price can trade above or below its underlying net asset value (NAV).
As of September 18, 2026, the share price was approximately 1,517.5p, while its fair-value NAV was around 1,685.9p. This represented a discount of roughly 9.9%.
A discount means investors can buy shares for less than the stated value of the trust’s underlying assets. However, the discount can widen or narrow over time, so the 9.9% figure should be treated only as a snapshot for that date.
Scottish Mortgage Fees
Scottish Mortgage reported ongoing charges of 0.33% as of March 31, 2026.
These ongoing charges include the management fee and other administrative expenses associated with running the trust.
Investors should also consider any separate platform, brokerage or dealing costs that may apply when buying or selling Scottish Mortgage shares.
Baillie Gifford Performance in 2026
There is no single figure that represents Baillie Gifford performance because each fund follows a different strategy and has its own benchmark, geographic exposure and risk profile.
Performance has varied considerably across the fund range. Some emerging-market and Asia-focused strategies recorded strong recent gains, while several major growth funds remained behind their benchmarks.
The table below shows performance through August 31, 2026:
| Fund | 1-Year Return | 3-Year Annualized | 5-Year Annualized |
|---|---|---|---|
| American Fund | -6.7% | 14.3% | -4.1% |
| Long Term Global Growth | -7.2% | 12.2% | -0.8% |
| Japanese Fund | 18.5% | 14.4% | 4.8% |
| Emerging Markets Growth | 54.1% | 24.0% | 9.0% |
| Pacific Fund | 58.8% | 26.2% | 9.1% |
The three-year and five-year figures are annualized returns, meaning they represent the average yearly return over those periods rather than the total cumulative return.
The results also show why Baillie Gifford funds should be assessed individually. The Pacific and Emerging Markets Growth funds recorded particularly strong one-year returns, while the American Fund and Long Term Global Growth strategy experienced much weaker results.
Past performance is not a guide to future returns.
American Fund Performance vs S&P 500
The Baillie Gifford American Fund significantly underperformed the S&P 500 over the periods shown.
For the year ending August 31, 2026:
- American Fund: -6.7%
- S&P 500: 19.8%
Over five years annualized:
- American Fund: -4.1%
- S&P 500: 13.1%
The difference illustrates how far a concentrated active portfolio can move away from its benchmark. Because the American Fund does not attempt to replicate the S&P 500, its results depend heavily on the performance of the individual companies selected by its managers.
Long Term Global Growth Performance
The Long Term Global Growth Investment Fund also experienced substantial benchmark underperformance over the periods shown.
For the year ending August 31, 2026:
- LTGG: -7.2%
- Comparative index: 22.2%
Over five years annualized:
- LTGG: -0.8%
- Comparative index: 11.7%
These results highlight an important feature of the Baillie Gifford investment strategy. Portfolios that differ substantially from their benchmarks can experience long periods of underperformance as well as periods of strong outperformance.
Investors should therefore consider longer-term results, portfolio holdings, risk and benchmark comparisons rather than judging a fund from a single year of performance.
Why Can Baillie Gifford Performance Be Volatile?
Baillie Gifford performance can differ significantly from broader market indexes because many of its funds follow concentrated, actively managed growth strategies.
Several factors can contribute to this volatility.
1. Growth Stock Exposure
Many Baillie Gifford portfolios invest heavily in companies expected to generate strong future growth.
These stocks can rise substantially when growth expectations are high, but they can also fall sharply when interest rates rise, earnings expectations weaken or investors become less willing to pay high valuations for future profits.
2. Concentrated Portfolios
Some Baillie Gifford funds hold fewer companies than broad market indexes.
This means successful holdings can make a larger contribution to returns. However, the opposite is also true. If one or more major holdings fall sharply, they can have a greater negative effect on the overall portfolio.
3. Long Investment Horizons
Baillie Gifford generally takes a long-term approach to investing.
Managers may continue holding a company through periods of weak share-price performance when they believe its long-term growth opportunity remains attractive.
This patience can benefit a portfolio when the investment eventually succeeds, but it can also result in extended periods of underperformance.
4. Geographic Differences
Some portfolios have geographic allocations that differ substantially from their benchmarks.
For example, the Long Term Global Growth Investment Fund had greater exposure to China and lower exposure to the US than its comparative index in August 2026.
These differences mean changes in individual countries, currencies or regional markets can affect the fund differently from the broader index.
Overall, volatility is an important part of understanding the Baillie Gifford investment approach. Its funds are designed to follow managers’ long-term investment convictions rather than closely track market indexes.
Baillie Gifford and Private Companies
Private-market investing has become an important part of Baillie Gifford’s investment strategy. The firm began investing in private growth companies in 2012, allowing its investment teams to back selected businesses before they reach the public stock market.
As of June 30, 2026, Baillie Gifford reported:
- More than $11 billion invested
- 172 private companies across its portfolios
Its private-company investments have included businesses such as Databricks, Stripe, ByteDance and Anthropic. The firm says more than 80% of its private deals are sourced through its own network.
Private investing fits Baillie Gifford’s long-term approach because some rapidly growing companies now remain privately owned for longer before considering a public listing.
Why Private Companies Matter
A growing company can create a significant amount of value before its shares become available on a public stock exchange. Investing privately gives Baillie Gifford the opportunity to participate in that earlier stage of growth when managers believe the long-term potential justifies the risk.
However, private-company investing brings additional risks. Shares can be harder to sell, valuations are less transparent, and financial information may be more limited than for publicly listed companies.
Private-company valuations can also change substantially before an eventual IPO, acquisition or other exit. Investors should therefore consider both the potential growth opportunity and the additional uncertainty associated with private assets.
Artificial Intelligence and Baillie Gifford
Artificial intelligence is becoming more important across Baillie Gifford portfolios as the firm invests in companies that could benefit from long-term growth in AI and digital technology. Its exposure is not limited to companies developing AI models but extends across the wider technology ecosystem.
Key areas of AI-related exposure include:
- Semiconductors—advanced chips used for AI computing
- Chipmaking equipment—technology required to manufacture advanced processors
- Cloud computing—infrastructure used to train and run AI applications
- Data centers – computing capacity needed for AI workloads
- Software and digital platforms—businesses using AI to improve products and services
- Automation—technologies that use AI to improve efficiency and productivity
Companies such as NVIDIA, Amazon, ASML and TSMC were among the largest holdings in Baillie Gifford’s Long Term Global Growth portfolio in August 2026.
These holdings show that the firm’s AI exposure covers different parts of the technology supply chain. However, Baillie Gifford still evaluates individual companies based on their long-term growth potential, competitive advantages and ability to turn technological change into sustainable business growth.
Baillie Gifford ETFs
A major development for Baillie Gifford in 2026 was its expansion into actively managed ETFs in the United States. These products give investors another way to access the firm’s active investment strategies through an exchange-traded structure.
The 2026 ETF range includes:
| ETF | Ticker |
|---|---|
| Emerging Markets ETF | BGEG |
| International Concentrated Growth ETF | BGCG |
| International Alpha ETF | BGIA |
| Long Term Global Growth ETF | BGGG |
| U.S. Equity Growth ETF | BGUS |
Although these products use an ETF structure, the underlying investment approach remains familiar. Baillie Gifford continues to emphasize bottom-up company research, long investment horizons and portfolios that can differ substantially from their benchmarks.
Baillie Gifford U.S. Equity Growth ETF
The Baillie Gifford U.S. Equity Growth ETF (BGUS) began trading in July 2026. It is designed as a concentrated US growth portfolio with approximately 30 to 50 holdings.
The ETF uses the Russell 1000 Growth Index as its benchmark and has a 0.60% total expense ratio.
BGUS extends Baillie Gifford’s established US growth-investing approach into an ETF format, offering exchange-traded access to a strategy focused on companies with strong long-term growth potential.
How to Invest in Baillie Gifford
Baillie Gifford is a privately owned partnership, so investors cannot buy shares in the asset-management company itself. Instead, they can access Baillie Gifford investment strategies through eligible funds, listed investment trusts and ETFs.
How an investor can access these products depends on the investment type and the country in which they are available.
Investing in Baillie Gifford Investment Trusts
Baillie Gifford does not provide a direct investment service for its investment trusts.
Shares in investment trusts such as Scottish Mortgage are generally bought and sold through a stockbroker, investment platform or another third-party provider, just like other shares listed on a stock exchange.
Investing Directly in Baillie Gifford OEIC Funds
For eligible UK OEIC funds, Baillie Gifford states that the minimum initial investment for a new investor investing directly is £100,000 per fund.
The minimum additional investment is £1,000 per fund.
These limits apply specifically to direct investment with Baillie Gifford. Third-party investment platforms can set different minimum amounts, so investors may be able to access eligible funds with a smaller investment through a platform.
Can Baillie Gifford Funds Be Held in an ISA or SIPP?
Baillie Gifford does not directly provide tax-wrapper or pension products such as:
- ISAs or Junior ISAs
- SIPPs or personal pensions
- savings plans
However, eligible Baillie Gifford funds and investment trusts may be available through third-party platforms that offer these account types.
Availability, minimum investment amounts, platform charges and tax treatment can vary, so investors should check the terms of their chosen provider before investing.
Baillie Gifford Fees
Baillie Gifford fees vary depending on the individual fund, investment trust, ETF and share class. There is no single fee that applies across the firm’s entire investment range.
Examples of published charges include:
| Investment | Published Cost |
|---|---|
| Scottish Mortgage Investment Trust | 0.33% ongoing charges |
| BGUS ETF | 0.60% total expense ratio |
Scottish Mortgage reported ongoing charges of 0.33% as of March 31, 2026, while the Baillie Gifford U.S. Equity Growth ETF (BGUS) has a published total expense ratio of 0.60%.
These figures should not be treated as the total cost of investing in every situation. Depending on the product and provider, investors may also pay platform fees, brokerage or dealing charges, foreign-exchange costs and bid-ask spreads. Taxes may also apply depending on the investor’s circumstances and jurisdiction.
Investors should therefore check the latest fund documents and their investment platform’s charges before investing.
Is Baillie Gifford Regulated?
Yes. Relevant Baillie Gifford entities operating in the UK are authorised and regulated by the Financial Conduct Authority (FCA).
The firm’s regulatory information lists the following FCA reference numbers:
| Entity | FCA Reference Number |
|---|---|
| Baillie Gifford & Co | 142597 |
| Baillie Gifford & Co Limited | 119179 |
| Baillie Gifford Overseas Limited | 121818 |
However, there is an important distinction between the investment manager and the investment trusts it manages. UK investment trusts are listed public companies and are not themselves authorised and regulated by the FCA in the same way as Baillie Gifford’s regulated management entities.
FCA regulation also does not prevent investment losses. The value of investments can rise or fall because of market conditions, company performance and other risks.
Main Risks of Baillie Gifford Funds
Like all investments, Baillie Gifford funds involve risk, and the level of risk varies between strategies. Growth-focused portfolios, emerging-market exposure, concentrated holdings and private-company investments can create additional volatility.
Investors should understand the main risks before considering any individual fund.
- Market risk: Share and bond prices can fall because of economic conditions, interest-rate changes, company-specific events or shifts in investor sentiment. This means investors may receive back less than they originally invested.
- Growth investment risk: Many Baillie Gifford strategies invest in companies expected to grow strongly in the future. Growth stocks can fall sharply when earnings expectations weaken or investors become less willing to pay high valuations.
- Concentration risk: Some funds hold relatively small numbers of companies. If one or more major holdings perform poorly, they can have a greater effect on overall returns. Concentration is particularly relevant to strategies such as the American Fund and Long Term Global Growth Fund.
- Currency risk: Funds investing internationally are exposed to exchange-rate movements. Changes in currencies can increase or reduce the value of overseas investments when returns are measured in pounds.
- Emerging-market risk: Investing in emerging markets can involve additional political, regulatory, liquidity, currency and corporate-governance risks. Some markets may also have different trading and settlement standards.
- Private-company risk: Private businesses can be more difficult to value and sell than publicly listed companies. Financial information may also be less widely available, adding uncertainty to valuations.
- Investment trust discount risk: Investment trusts can trade above or below their underlying net asset value. A widening discount can reduce an investor’s return even when the value of the underlying portfolio remains relatively stable.
- Gearing risk: Some investment trusts can borrow money to invest. Gearing can increase returns when investments perform well, but it can also increase losses when markets move in the opposite direction.
These risks do not affect every Baillie Gifford investment in the same way. Investors should check the risk disclosures, objectives and portfolio structure of the specific fund or investment trust they are researching.
Baillie Gifford vs Passive Index Funds
The Baillie Gifford investment approach is very different from passive index investing. Its active managers select individual companies they believe have strong long-term potential, while passive funds generally aim to follow the composition and performance of a particular index.
| Feature | Baillie Gifford Active Funds | Passive Index Funds |
|---|---|---|
| Security selection | Selected through active research | Determined mainly by index rules |
| Main objective | Seek to outperform a benchmark | Seek to track a benchmark |
| Holdings | Selected by fund managers | Based on index composition |
| Benchmark deviation | Can be substantial | Usually much smaller |
| Concentration | Can be relatively high | Often more diversified |
| Fees | Generally higher | Generally lower |
| Manager selection risk | More significant | Less dependent on stock-picking decisions |
| Performance vs benchmark | Can differ substantially | Usually designed to remain relatively close |
Passive funds generally seek broad market exposure at relatively low cost. Their returns are therefore largely determined by the index they track, minus fees and tracking differences.
Baillie Gifford takes a different approach. Its managers conduct research and build portfolios around selected companies they believe could produce strong long-term growth. This creates the possibility of outperforming a benchmark, but it also means returns can fall substantially behind the market.
Neither active nor passive investing guarantees better future returns.
What Should Investors Check Before Choosing a Baillie Gifford Fund?
Recent performance should not be the only factor considered when researching a Baillie Gifford fund. Investors should also understand what the fund owns, how it is managed and what risks they would be taking.
Important areas to check include:
- Strategy and benchmark: Understand the fund’s objective, benchmark and expected investment horizon.
- Portfolio exposure: Review its largest holdings, sectors, geographic exposure and any investments in private companies.
- Risk: Look at historical volatility, previous drawdowns, concentration and currency exposure.
- Costs: Check ongoing fund charges as well as any platform, dealing or other applicable costs.
- Structure: Determine whether it is an OEIC, ETF or investment trust. For investment trusts, also consider the discount or premium to NAV and the use of gearing.
These factors can vary considerably between Baillie Gifford funds. Two portfolios managed by the same firm may have very different holdings, risk levels and performance patterns, even when both follow a long-term growth philosophy.
Baillie Gifford Outlook for 2026 and Beyond
Looking beyond 2026, Baillie Gifford is likely to continue focusing on companies that could benefit from major changes in technology, healthcare and the global economy.
Important long-term themes include:
- Artificial intelligence and AI infrastructure
- Advanced semiconductors
- Cloud computing
- Automation
- Digital commerce
- Financial technology
- Healthcare innovation
- Electrification
- Emerging-market growth
- Private companies
These areas could create new investment opportunities, but a growing industry does not guarantee strong investment returns.
Company selection will remain important. Baillie Gifford must identify businesses that can turn long-term trends into real revenue, profits and sustainable growth. Valuation also matters because even a successful company can produce disappointing returns if investors pay too much for its shares.
Interest rates are another factor to watch. Higher rates can put pressure on growth-stock valuations, while changing economic conditions can affect different sectors in different ways.
For Baillie Gifford, the key question is not simply which industries will grow. The challenge is finding individual companies that can become long-term winners within those industries.
Conclusion
Baillie Gifford remains a distinctive active investment manager in 2026. Founded in Edinburgh in 1908 and still owned by its partners, the firm manages or advises approximately £197 billion across a range of investment strategies.
Its approach is built around long-term ownership, detailed company research and finding businesses with significant growth potential. However, performance varies considerably between funds. While the Emerging Markets Growth and Pacific funds delivered strong one-year results through August 2026, the American Fund and Long Term Global Growth Investment Fund remained behind their benchmarks over several important periods.
At the same time, Baillie Gifford continues to expand its investment opportunities through private companies, AI-related businesses, semiconductor companies and its move into the US active ETF market in 2026.
For investors researching Baillie Gifford, it is important to look beyond the name of the investment manager. Each fund has different holdings, fees, benchmarks, geographic exposure and risks, so each should be considered separately.
The future of the Baillie Gifford investment strategy will ultimately depend on whether its managers can continue finding promising companies early, assess their valuations carefully and hold successful investments long enough for business growth to create long-term shareholder value.
FAQs About Baillie Gifford
1. Is Baillie Gifford suitable for long-term investing?
Baillie Gifford primarily follows a long-term investment philosophy, with many strategies designed around companies that managers believe can grow significantly over several years. Suitability depends on an investor’s goals, risk tolerance and investment horizon.
2. Does Baillie Gifford pay dividends?
Some Baillie Gifford funds and investment trusts may distribute income, while others focus more heavily on capital growth. Dividend policies and yields vary by individual product and share class.
3. Does Baillie Gifford invest only in technology companies?
No. Baillie Gifford invests across multiple industries, although technology and growth-oriented businesses can represent significant positions in some portfolios.
4. Can Baillie Gifford funds lose money?
Yes. Baillie Gifford funds can fall in value because of market movements, company performance, currency changes and other investment risks. Investors may receive back less than they invest.
5. Are Baillie Gifford funds actively managed?
Most Baillie Gifford strategies discussed in this guide are actively managed. Fund managers research and select investments rather than simply attempting to replicate a market index.
6. Does Baillie Gifford invest in bonds?
Yes. Although Baillie Gifford is widely associated with equities and growth investing, the firm also manages fixed-income and multi-asset strategies.
7. Is Baillie Gifford only available to UK investors?
No. Baillie Gifford serves clients internationally, although individual funds and investment products may differ by country because of local regulations and distribution arrangements.
8. How often should Baillie Gifford fund performance be reviewed?
Investors researching Baillie Gifford should consider longer-term performance alongside shorter periods. Returns should also be compared with the relevant benchmark, fees, holdings and risk profile rather than viewed alone.
Disclaimer: This article is for general informational and educational purposes only. It does not constitute investment, financial, tax or legal advice. Investments can fall as well as rise in value, and investors may receive back less than they originally invested. Past performance does not guarantee future results.
Source: Cosmo Politian
