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 Global Alpha portfolio returned double-digits in Q2 2026 but lagged the MSCI ACWI index, which was driven by AI-related hardware stocks. The portfolio has delivered almost 20% since the start of 2025, underpinned by strong sales, earnings, and returns growth that have gone relatively unrewarded. This mismatch has caused the portfolio's valuation premium versus the market to evaporate, reaching unprecedented territory with the strategy now trading at a discount on some measures. The manager maintains significant AI exposure through core positions in NVIDIA and TSMC (over 10% combined), hyperscalers Amazon and Alphabet, and newly added specialized equipment makers Besi and Lasertec. Beyond AI, the team added positions in copper miners, industrial gas leader Linde, and Axon Enterprise after its sell-off on misplaced AI concerns. The portfolio's higher expected earnings growth, stronger financial positions, and broad set of growth drivers position it for substantial outperformance as market focus expands beyond the single AI theme. The manager remains convinced that breadth, resilience, and growth will deliver long-term returns.
The Global Alpha portfolio is positioned to deliver outperformance through a broad set of high-quality growth businesses trading at an unprecedented valuation discount to the market, with significant exposure to the AI buildout through durable competitive positions and underappreciated niches in the supply chain, while maintaining breadth across multiple growth drivers including emerging market champions, industry consolidators, and innovative business models.
The manager expects substantial rewards for patience given the portfolio's unprecedented valuation discount to the market despite higher expected earnings growth. They believe the businesses owned will deliver much better growth than consensus estimates. The portfolio's breadth, resilience, and stronger financial positions versus the index should enable holdings to weather most storms in good shape. The team will remain ambitious and long-term while adapting to stock market realities, relentlessly seeking the best opportunities to own great growth businesses.
As of Jul 29, 2026
The Global Alpha strategy is managed by an experienced team at Baillie Gifford including Helen Xiong, Malcolm MacColl, Spencer Adair, and Michael Taylor, all seasoned investment professionals with extensive tenure at the firm. Baillie Gifford Overseas Limited, the primary investment manager, operates from Edinburgh with additional offices in New York, managing approximately $162.55 billion in total regulatory assets across all strategies with a team of approximately 1,583 staff globally. The firm has established a strong reputation for long-term investment approaches and maintains 144 employees performing investment advisory functions. The management team demonstrates consistency in investment philosophy and deep institutional knowledge of portfolio companies, with the firm serving 307 accounts including significant exposure to non-U.S. persons representing about 49% of clients. Baillie Gifford has been operating various fund vehicles since 2009, with the Global Alpha strategy available across multiple jurisdictions including the US, Canada, UK, and international markets through different regulatory structures.
The Global Alpha strategy employs a long-term, bottom-up approach to global equity investment, focusing on identifying companies with exceptional growth prospects through fundamental analysis. The strategy concentrates on three distinct growth profiles: Disruptors that transform industries through innovation, Compounders with sustainable competitive advantages delivering consistent above-average earnings growth, and Capital Allocators with management teams demonstrating exceptional skill in deploying capital for superior returns. The portfolio maintains 70-120 holdings with an active share of 79%, targeting companies regardless of geographic location but emphasizing those with superior long-term earnings growth potential. The investment approach prioritizes stock selection as the primary driver of returns, accepting higher volatility in exchange for the potential to capture exceptional long-term growth. The strategy excludes companies based on harmful business activities and enforces good governance standards while promoting environmental and social characteristics under SFDR guidelines.
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
The portfolio demonstrates high conviction through concentrated positions: NVIDIA and TSMC together exceed 10%, and the four core AI holdings (adding Amazon and Alphabet) represent over half of the AI supply chain exposure. The manager names specific positions, discusses sizing ('c. 3 percent' to memory chipmakers), and explains why they favor durable competitive positions over marginal players. However, the portfolio appears to hold 20+ positions given the breadth discussed across sectors and geographies, and some hedging language appears ('we think,' 'should deliver'). The combination of concentrated core positions with named, sized holdings and clear thesis articulation, balanced against portfolio breadth, places this in the high-moderate to high conviction range.
Growth Outlook
While noting macroeconomic uncertainties, energy shocks, and geopolitical friction, the manager remains constructive on stock-specific opportunities emerging across cyclical, energy, and AI-enabled sectors.
Risk Appetite
The fund actively embraces out-of-favor or volatile growth assets experiencing market selloffs (e.g., software platforms, copper, energy) while maintaining a low cash level of 1.73%.
Capital Deployment
The manager added four new positions during the quarter (SK Hynix, Besi, Lasertec, Wärtsilä) and established a holding in Axon Enterprise, indicating moderate deployment activity. They also added to existing holdings that sold off. The letter states they have 'deliberately built up prior areas of underexposure over the past several months' to broaden growth drivers. However, no specific cash level changes are disclosed, and the activity appears to be selective adding to out-of-favor names rather than aggressive broad deployment. The rotation into new names combined with adding to existing positions suggests moderate net deployment.
Forward Guidance
The manager provides an optimistic long-term outlook, expressing confidence that broadening the growth drivers leaves the fund well-positioned to deliver superior compounding across a variety of economic outcomes.
Language Signal
The letter balances opportunity language with acknowledgment of challenges. Bullish terms include 'unprecedented territory,' 'on sale,' 'highly attractive,' 'substantial' rewards, 'wonderful growth businesses,' and 'compelling value.' Risk language includes concerns about 'mono-thematic market,' 'poorly defined AI concerns,' cyclicality, and the portfolio being 'well behind' index returns. The net balance tilts slightly positive with more emphasis on mispricing opportunities and long-term growth potential, but the tone is measured rather than overwhelmingly bullish.
Perceived Risk
The letter highlights significant external risks including geopolitical instability, energy market disruptions, inflation, and market anxieties regarding technological disruption.
Opportunity Density
The manager sees abundant opportunities across multiple areas: underappreciated niches in the AI supply chain (Besi, Lasertec), copper supply-demand imbalance, emerging market champions, industry consolidators (QXO, Linde), and mispriced software businesses (Axon). They state that 'wonderful growth businesses' have been placed 'on sale' and emphasize finding 'the best growth businesses of tomorrow' beyond the largest market constituents. The language of 'plenty of growth available' in fragmented industries and the variety of new positions added indicate a selective but rich opportunity set across defined areas.
Time Horizon
The manager explicitly emphasizes long-term orientation throughout, stating they will 'remain ambitious and long-term' and that 'the importance of fundamentals in driving long-term share price returns hasn't changed.' They discuss Linde's compounding opportunity persisting 'for over a decade' and frame AI as 'the defining feature of the next decade of investing.' The letter emphasizes patience, with the closing statement that 'Your patience with us as we rebuild the strategy's returns is hugely important.' The focus is on multi-year thesis realization with no urgency around near-term catalysts, though some catalyst dependency exists (memory capacity coming online in 'a year or two'). The emphasis on long-term fundamentals over short-term momentum places this in the multi-year thesis range.
Top Conviction Themes
Key Catalysts
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