The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
Baillie Gifford's Emerging Markets strategy delivered strong Q2 2026 outperformance driven by semiconductor holdings TSMC, Samsung Electronics, and SK Hynix, which now represent 30 percent of the MSCI Emerging Markets Index and 40 percent of the portfolio. These companies have seen share prices soar alongside profits and cash flows, with valuations remaining rational as AI capital expenditure drives exceptional demand for memory and advanced packaging. The team initiated these holdings in the 2000s on the belief that the world would need more silicon chips, with AI representing the latest and perhaps biggest iteration of this thesis. While acknowledging ultimate cyclicality, the team believes medium-term outlook remains strong despite deployment challenges. The team has been taking profits and recycling proceeds into less correlated opportunities, particularly in China, which has declined from 43 percent to below 20 percent of the index. China's pivot to self-sufficiency has established leadership in solar, wind, batteries, and electric vehicles. Brazilian holdings faced headwinds from high interest rates and fiscal concerns. The team views emerging markets as undervalued and lightly held, with the biggest risk being insufficient exposure.
Emerging markets are home to world-class companies controlling critical bottlenecks in semiconductors and leading the energy transition, with the AI capital expenditure cycle providing proceeds to diversify into undervalued opportunities in China and other markets positioned to benefit from global security and resilience priorities.
The team continues to find exciting opportunities around emerging markets across a range of countries, sectors, and industries. The proceeds of the AI capital expenditure cycle are proving a rich pool of capital to reinvest. Security and resilience priorities are driving higher defense spending and supply chain diversification, with emerging markets positioned to provide necessary raw materials, products, and expertise. The team views the asset class as increasingly home to world-class companies driving product and service innovation worldwide. From the bottom up, the asset class is still undervalued and from the top down it is still lightly held. The biggest risk for emerging markets investors is not owning enough.
As of Jul 23, 2026
Lead Portfolio Manager & CIO
Moderate Conviction Bullish
Market Conviction
The manager demonstrates high conviction through concentrated positioning, with three semiconductor names representing 40 percent of the portfolio and explicit statements about maintaining overweight positions. The letter names specific holdings with detailed performance commentary and sizing language. The team has held TSMC and Samsung continuously since the 2000s, demonstrating long-term commitment. However, the active profit-taking and emphasis on diversification prevents a score above 0.75. The manager is convicted but managing concentration risk, not running a single-thesis concentrated fund.
Growth Outlook
The manager acknowledges significant near-term challenges from Middle East conflict and market volatility, stating markets likely to remain 'risk off' and unlikely to deliver much absolute performance in the short term. However, maintains constructive long-term view on emerging markets fundamentals and structural opportunities.
Risk Appetite
Fund maintains current positioning with some recycling of AI profits into other areas. Manager describes being 'relatively well-positioned' but not complacent, suggesting cautious but not defensive stance. No major changes to risk appetite indicated.
Capital Deployment
The manager is engaged in capital rotation rather than net deployment or de-risking. The letter explicitly states the team has been taking profits on semiconductor stocks on the way up and recycling proceeds into areas believed to be less correlated with AI capital expenditure. This is rotation, not net deployment of new cash. No cash level changes are disclosed. The manager is redeploying proceeds from winners into China and other opportunities, but this represents reallocation within the portfolio rather than increasing or decreasing net exposure. Rotation scores near zero per the guidelines.
Forward Guidance
Manager indicates selective monitoring with team recently traveling to uncover next generation of growth companies. Some consideration given to repercussions of protracted war but no major deployment changes signaled. Maintains patient, selective approach.
Language Signal
The letter balances bullish language about opportunities, undervaluation, and world-class companies with cautious acknowledgment of cyclicality, concentration risks, and air pockets. Bullish terms include exciting opportunities, undervalued, world-class companies, rich pool of capital, and strongest position. Bearish or cautious language includes concentration concern, ultimately cyclical, air pockets, bust, and weaker cash conversion. The net balance is roughly neutral with a slight positive tilt given the emphasis on opportunity abundance in the outlook section.
Perceived Risk
Manager identifies multiple specific risks including protracted Middle East conflict, sustained high oil prices, embedded inflation, central bank responses, and AI platform disruption. Discusses stress-testing scenarios and acknowledges vulnerabilities, though maintains these are manageable within current positioning.
Opportunity Density
The manager views the opportunity set as broad and attractive. The letter states the team continues to find exciting opportunities around emerging markets across a range of countries, sectors, and industries. China is described as one of the most interesting redeployment possibilities. The AI capital expenditure cycle is characterized as providing a rich pool of capital to reinvest. The outlook emphasizes that from the bottom up, the asset class is still undervalued and from the top down it is still lightly held. Multiple specific opportunities are named across semiconductors, China technology, Brazilian financials, and energy. This reflects a rich opportunity set rather than selective or sparse conditions.
Time Horizon
The manager demonstrates a multi-year investment horizon with patience for thesis realization. The letter states the team has held TSMC and Samsung Electronics continuously since the 2000s, demonstrating decade-plus commitment to core holdings. For MercadoLibre, the manager explicitly states belief that medium-term investment sets it up for a long runway of growth in the future, showing willingness to hold through near-term margin pressure. The acknowledgment that semiconductor cyclicality will eventually require action but not feeling that time is now indicates a multi-year view. However, the active profit-taking and rotation suggests the manager is not purely buy-and-hold, preventing a score above 0.75.
Top Conviction Themes
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