| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.66% | -6.7% | 16.7% |
| 2025 |
|---|
| 16.7% |
Baillie Gifford's International Concentrated Growth Equities Fund declined 0.63% in Q4 2025, underperforming its benchmark as international equities advanced on prospects of more supportive interest rates in 2026. The Fund maintains a concentrated portfolio of 27 exceptional growth companies with a 10-year investment horizon, focusing on structural transformations including artificial intelligence acceleration, e-commerce expansion, and media digitization. Key detractors included MercadoLibre, Spotify, and Sea Limited, which faced near-term margin pressures despite strong revenue growth as they invest in competitive positioning. Top contributors TSMC, ASML, and Shopify benefited from AI-driven demand and strong operational execution. The managers made no new investments or sales during the quarter, maintaining conviction in their concentrated approach. Despite living through a paradoxical and turbulent period, they remain optimistic about navigating volatility and leveraging their understanding of structural changes to create long-term value. The portfolio is positioned to harness ongoing disruption across technology, commerce, and media sectors.
The Fund invests in exceptional growth companies with 10-year investment horizons, focusing on structural changes that will drive economies over the next decade, including AI acceleration, e-commerce expansion, and media digitization.
The managers remain optimistic about the scale of change ahead, focusing on structural transformations including compute and generative AI acceleration, continued e-commerce reshaping of retail, ongoing digitization of media consumption, and healthcare innovation. They believe their concentrated portfolio of exceptional growth businesses is well-positioned to harness the disruption underway and deliver attractive long-term returns.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 15 2026 | 2025 Q4 | 0700.HK, 1211.HK, 1810.HK, 2413.T, 3690.HK, ADYEN.AS, ASML, ATCO-A.ST, BABA, BNTX, CPNG, DHER.DE, KER.PA, KINV-B.ST, MELI, MRNA, NU, NVDA, NVO, OCDO.L, OR.PA, PDD, RACE, RMS.PA, SAP, SE, SHOP, SPOT, TSLA, TSM, WISE.L | AI, concentrated, E-Commerce, growth, international, semiconductors, technology | - | Baillie Gifford's concentrated international growth fund declined 0.63% in Q4 despite strong underlying fundamentals across AI, e-commerce, and streaming holdings. Near-term margin pressures at MercadoLibre, Spotify, and Sea Limited offset gains from semiconductor leaders TSMC and ASML. Managers maintain conviction in structural growth themes and 10-year investment horizon approach. |
| Oct 20 2025 | 2025 Q3 | ADYEY, ASML, MELI, SHOP, SPOT, TSM | AI, E-Commerce, global, growth, payments, semiconductors, technology |
MELI SPOT ADYEN SHOP TSM ASML MELI SPOT ADYEN SHOP TSM ASML |
Baillie Gifford's concentrated growth fund underperformed in Q3 2025 despite strong performance from semiconductor holdings TSMC and ASML driven by AI demand. E-commerce platforms MercadoLibre and Shopify showed mixed results with margin pressures offset by growth momentum. The fund maintains conviction in structural growth themes including AI, digital commerce, and advanced technology platforms with compounding advantages. |
| Jul 11 2025 | 2025 Q2 | - | - | - | |
| Apr 18 2025 | 2025 Q1 | 1211.HK, AMZN, META, NVDA, TSLA | AI, China, competition, Electric Vehicles, growth, innovation, semiconductors, technology |
NVDA TSLA 1211.HK |
Baillie Gifford's concentrated growth strategy repositioned during Q1 2025, exiting Tesla completely while maintaining trimmed NVIDIA position and newer BYD holding. NVIDIA's AI dominance continues with 40-fold performance roadmap, while BYD's free autonomous driving strategy pressures Tesla's premium pricing model. Long-term innovation focus remains intact despite cyclical industry headwinds. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIArtificial intelligence continues to drive rapid operational progress across semiconductor and technology companies. TSMC reported over 40% revenue growth driven by AI-led demand, while advanced nodes account for 74% of wafer revenue. AI acceleration is reshaping industries and driving increasing lithography intensity. |
Artificial Intelligence Semiconductors Computing Technology Innovation |
E-commerceE-commerce continues to reshape retail through greater convenience and lower costs. MercadoLibre maintains its dominant position in Latin America despite margin compression from investments in free shipping and credit expansion. Shopify demonstrates strong growth with disciplined cash generation, combining 32% revenue growth with 18% free cash flow margin. |
Digital Commerce Online Retail Marketplaces Digital Transformation Retail | |
StreamingDigital media consumption continues progressing with Spotify showing continued operating progress. Users increased 11% to 713 million and subscribers grew 12% to 281 million, while operating income expanded to mid-teens margin alongside record quarterly free cash flow. The platform benefits from pricing, product innovation, and advertising efficiency. |
Digital Media Audio Streaming Subscription Content Entertainment | |
SemiconductorsSemiconductor industry shows strong momentum driven by AI demand and advanced manufacturing. TSMC leads with process leadership and deep customer entrenchment, while ASML maintains irreplaceable EUV position. Demand visibility has improved with substantial EUV bookings and expectations for continued growth through 2026. |
Chip Manufacturing Foundries Lithography Advanced Nodes Technology | |
| 2025 Q3 |
E-commerceThe fund maintains significant exposure to leading e-commerce platforms like MercadoLibre and Shopify. MercadoLibre continues to grow revenues strongly through deepening free-shipping incentives in Brazil that boost GMV despite margin pressure. Shopify demonstrates broad-based growth with particularly strong momentum in Europe where GMV rose over 40% last quarter. |
Platforms GMV Digital Commerce Growth |
SemiconductorsThe fund has meaningful exposure to the semiconductor value chain through holdings like TSMC and ASML. TSMC reported impressive results with revenue up nearly 40% year-over-year and margins above 58%, driven by demand for advanced chips powering AI and high-performance computing. ASML continues its dominance in advanced lithography with rising demand for AI-related chips pressuring customers to adopt EUV technology. |
Foundries Lithography AI Advanced Nodes | |
AIArtificial intelligence is a key driver across multiple holdings, particularly in the semiconductor value chain. TSMC benefits from demand for advanced chips powering AI and high-performance computing. ASML sees rising demand for AI-related chips pressuring customers to push into more advanced nodes and adopt EUV technology where it has an effective monopoly. |
Computing Chips Advanced Technology Growth | |
PaymentsThe fund holds Adyen, a global payments platform with a low-cost single software stack enabling merchants to accept transactions across online, mobile, and in-store channels. Despite cautious guidance amid macro headwinds, Adyen reported good first-half results with resilient profitability and cash generation alongside continued customer growth. |
Platforms Merchants Transactions Global Software | |
| 2025 Q1 |
AINVIDIA maintains dominant position in AI chips with 17-fold price-performance improvement since 2016 and roadmap for 40-fold improvement over next 4-5 years. Custom silicon alternatives from Amazon and Meta have not unseated NVIDIA's GPUs due to rapid pace of innovation requiring generalized platforms. Developers cannot keep up with technology improvements, with potential for another transformative shift comparable to transformers enabling ChatGPT. |
NVIDIA GPUs Custom Silicon Performance Innovation |
Electric VehiclesTesla sold completely from portfolio after 10 years due to increased competition and need for strong second act in robotics or autonomous driving. BYD now dominates EV manufacturing, stealing crown from Tesla. BYD offers autonomous driving features for free while Tesla charges $8,000-$9,000, potentially pressuring other automakers' margins and opening competitive space further for BYD. |
Tesla BYD Competition Autonomous Driving Pricing | |
SemiconductorsSemiconductor industry remains cyclical with no structural reasons for change. NVIDIA trimmed over past year as price increased, balancing enthusiasm for long-term opportunity with cyclical nature. Software recurring revenue for NVIDIA remains possibility but not current priority given chip supply constraints. |
Cyclical Valuation Hardware Supply Revenue |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 20, 2025 | Fund Letters | Paulina McPadden | TSM | Taiwan Semiconductor Manufacturing Co. | Information Technology | Semiconductors | Bull | NYSE | AI, Capacity, Foundry, margin expansion, Pricing power, semiconductors, technology leadership | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | MELI | MercadoLibre Inc. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | e-commerce, Fintech, GMV, Latin America, long-term growth, Margins, market share | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | MELI | MercadoLibre Inc. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | e-commerce, Fintech, GMV, Latin America, long-term growth, Margins, market share | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | ASML | ASML Holding NV | Information Technology | Semiconductor Equipment | Bull | - | AI, backlog, Euv, Lithography, Monopoly, recurring revenue, semiconductors | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | SPOT | Spotify Technology SA | Communication Services | Streaming Services | Bull | NYSE | advertising, ARPU, Engagement, Free Cash Flow, Margins, Personalization, Streaming | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | SPOT | Spotify Technology SA | Communication Services | Streaming Services | Bull | NYSE | advertising, ARPU, Engagement, Free Cash Flow, Margins, Personalization, Streaming | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | ADYEN | Adyen NV | Information Technology | Transaction & Payment Processing | Bull | - | Digital adoption, e-commerce, EBITDA, Fintech, Margins, Payments, secular growth | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | SHOP | Shopify Inc. | Information Technology | Application Software | Bull | NYSE | e-commerce, global expansion, GMV, Margins, network effects, Point of Sale, SaaS | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | TSM | Taiwan Semiconductor Manufacturing Co. | Information Technology | Semiconductors | Bull | NYSE | AI, Capacity, Foundry, margin expansion, Pricing power, semiconductors, technology leadership | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | ADYEN | Adyen NV | Information Technology | Transaction & Payment Processing | Bull | - | Digital adoption, e-commerce, EBITDA, Fintech, Margins, Payments, secular growth | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | ASML | ASML Holding NV | Information Technology | Semiconductor Equipment | Bull | - | AI, backlog, Euv, Lithography, Monopoly, recurring revenue, semiconductors | Login |
| Oct 20, 2025 | Fund Letters | Paulina McPadden | SHOP | Shopify Inc. | Information Technology | Application Software | Bull | NYSE | e-commerce, global expansion, GMV, Margins, network effects, Point of Sale, SaaS | Login |
| Apr 1, 2025 | Fund Letters | Baillie Gifford -International Concentrated Growth | TSLA | Tesla, Inc. | Consumer Discretionary | Automobiles | Bear | NASDAQ | automotive, autonomous driving, Competition, Electric Vehicles, EV, robotics, valuation | Login |
| Apr 1, 2025 | Fund Letters | Baillie Gifford -International Concentrated Growth | NVDA | NVIDIA Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, Cyclical, GPUs, Hardware, machine learning, Performance, semiconductors, technology | Login |
| Apr 1, 2025 | Fund Letters | Baillie Gifford -International Concentrated Growth | 1211.HK | BYD Company Limited | Consumer Discretionary | Automobiles | Bull | Hong Kong Stock Exchange | autonomous driving, Charging Technology, Chinese, Competition, Electric Vehicles, EV, innovation, renewable energy | Login |
| TICKER | COMMENTARY |
|---|---|
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 1211.HK | The contributors in returns in 2025 came from BYD Co Ltd, American Express Co, and Bank of America Corp. Similarly with BYD, the thesis is simple. It has the most integrated operations and lowest costs. Yes, there is currently a price war but that means that BYD can drive much-needed consolidation in China and perhaps beyond. Moreover, with its low-cost structure, BYD can choose to return the industry to profitability when it wants. |
| 1810.HK | Shares declined amid inconsistent growth in the smartphone business, with strong competition limiting market share gains, while rising memory chip prices also pressured smartphone margins. In the electric vehicle business, Xiaomi has struggled to scale production to meet order demand. |
| ASML | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| ATCO-A.ST | Atlas Copco supplies industrial products and components, such as vacuum valves, air compressors, filters and pumps, into a wide variety of end markets. We expect the businesses we own to be commercially ambitious and look to grow their revenue faster than the markets they serve – even more so when those markets are challenged. We sold Atlas Copco in May, having become disappointed with its lack of observable self-help initiatives. |
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| BNTX | BioNTech SE -14 |
| CPNG | Shares of Coupang, Inc., Korea's largest e-commerce platform, declined 26.7% in the fourth quarter (though up 7.3% in 2025). The weakness was initially driven by elevated upfront investments in its new market, Taiwan, where aggressive customer acquisition, supplier onboarding and product procurement, and logistics infrastructure buildout weighed on near-term profitability. |
| KER.PA | Shares like Kering (Gucci, Saint Laurent, Bottega Veneta) |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| NU | Since our mid-year update, Nubank's shares increased 37%, bringing full-year performance to +63%. This performance has been driven primarily by fundamentals, with earnings growing approximately 42% over the same period. Brazil remains a powerful profit engine, with high customer engagement, improving risk-adjusted returns, and expanding penetration across consumer and SME banking. Mexico continues to emerge as the next major growth vector: customer penetration has reached ~14% of the population. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| NVO | added a new holding in Novo Nordisk, which had seen its share price decline by two thirds since mid-2024 |
| OR.PA | In 2024, it seemed to us that other investors were unduly focused on a slowdown in consumer spending in China, an important market for L'Oréal yet contributing only 17% of its sales. L'Oréal is a broad, balanced business such that in any given year, faster-growing parts of the world will typically offset the weaker ones. We saw this in 2025, where strength in markets such as Europe, the Middle East and South America offset sluggish markets in China and the US, allowing L'Oréal to deliver a year of solid earnings growth. |
| PDD | weakest performers included PDD (-14%) |
| RACE | Our largest common stock holding is Ferrari. Over the last three years we have purchased 543,800 shares. At year-end, our investment in Ferrari was valued at $202.3 million. When we started purchasing shares in 2022, we were thinking about what the company would look like in two decades. Ferrari's vehicles will, of course, continue to change over the coming years, but we think the reasons people will choose the brand in the 2040s will be nearly the same as they are today. We believe Ferrari is one such company that has sustained its competitive edge. |
| RMS.PA | Hermès was founded in Paris in 1837 as a maker of harnesses and saddles for Europe's horse-drawn elite. From the outset, the company was defined by functional excellence and craftsmanship rather than fashion. Today, the group is one of the most profitable companies in global luxury, with activities spanning leather goods, ready-to-wear, silk, jewellery, watches and homewares. Despite operating more than 300 stores globally and employing over 20,000 people, Hermès continues to behave less like a conglomerate and more like a craft maison, prioritising long-term brand equity over near-term growth. This mindset underpins why we find Hermès such a compelling business. Its brand equity is built not on seasonal fashion or loud marketing but on function, heritage and longevity. Hermès has delivered exceptional consistency in returns on capital and earnings through cycles, underpinned by disciplined supply, minimal discounting and limited fashion risk. This reduces downside volatility and supports higher through-cycle multiples. The benefits of the Hermès model have been particularly evident through the recent challenging period for the luxury sector. Slowing global demand, softer Chinese consumption and inventory pressure have led to revenue declines and margin contraction for many peers. Hermès has stood apart. Growth has moderated but remained positive, margins have proven resilient, and inventory discipline has been maintained. |
| SAP | We trimmed SAP SE. |
| SE | During the quarter, we initiated a new position in Sea Limited, a Southeast Asian consumer internet company with an integrated ecosystem combining e-commerce, digital payments, and entertainment. Sea has a diversified business model, with its Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payments, logistics infrastructure, and seller services. |
| SHOP | Shopify Inc. is a cloud-based software provider for multi-channel commerce. Shares rose 8.3% in the fourth quarter, finishing 2025 up 51.1% on strong financial results that outperformed Street expectations. The company is demonstrating rapid growth at scale with gross merchandise value (GMV) and revenues each growing over 30% year-on-year. |
| SPOT | Spotify is the world's leading audio streaming platform. Third-quarter results showed continued operating progress, with users increasing 11% to 713 million and subscribers growing 12% to 281 million. Meanwhile, operating income expanded to a mid-teens margin, alongside a record quarterly free cash flow. Despite the momentum, the shares weakened as investors reset near-term margin expectations. Spotify has been a top contributor to long-term Fund performance, and we remain confident that pricing, product innovation, advertising efficiency, and an expanding ecosystem can continue to widen margins over time, as reinforced this quarter by the launch of Spotify recommendations within ChatGPT. |
| TSLA | Under the previous system, companies that produced only electric vehicles—most notably Tesla—generated large quantities of credits that could then be sold to manufacturers falling short of their EV production targets, allowing them to avoid regulatory penalties. |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
| WISE.L | Wise is the most asymmetric investment in our portfolio today and illustrates the idea of bounded downside and long-run upside in practice. Wise helps consumers and businesses hold and move money across borders, taking market share from the legacy correspondent banking model through infrastructure that is cheaper, faster, and more transparent. |
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