| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.7% | 1.2% | 19.6% |
| 2025 |
|---|
| 19.6% |
Baillie Gifford International Alpha delivered a low-single-digit positive return in Q4 2025 but underperformed the index despite a strong year for value stocks in international markets. The fund benefited from top contributors Samsung Electronics, which passed Nvidia qualification for HBM3E chips and reported record memory division sales, and DSV, which rebounded on strong results and accelerated DB Schenker integration. Key detractors included MercadoLibre, facing margin pressure from Brazilian competition, and Tencent Music Entertainment, which corrected on profitability mix concerns. The managers made four new purchases including copper miner Lundin Mining, semiconductor equipment maker Tokyo Electron, salmon farmer SalMar, and chip designer MediaTek, while exiting positions in B&M, EXOR, Amadeus, and Dassault Systèmes where conviction weakened. Looking ahead, the team expects a more supportive macro backdrop in 2026 and remains confident that operational strength will translate into performance as markets refocus on fundamentals rather than macro concerns.
The International Alpha Process aims to deliver strong long-term returns by combining deep local expertise with strategic perspective, constructing a diversified portfolio of growth businesses from disruptive innovators to quality compounders through active stock picking.
We enter the year confident that the Fund's operational strength will translate into share price performance as markets refocus on fundamentals. Diverse sources of structural growth across the fund support attractive long-term return potential, and we remain committed to investing in high-quality companies with durable growth tailwinds.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 15 2026 | 2025 Q4 | 000333.SZ, 005930.KS, 0700.HK, 1299.HK, 1698.HK, 2318.HK, 2454.TW, 3064.T, 3656.T, 3690.HK, 3994.T, 4612.T, 600519.SS, 6098.T, 6273.T, 6758.T, 6861.T, 7309.T, 7733.T, 7974.T, 8035.T, 8113.T, 8729.T, ADYEN.AS, ASML, ATCO-A.ST, B3SA3.SA, BN.PA, BNTX, CFR.SW, CPA, CPNG, CRH, CSU.TO, DB1.DE, DEMANT.CO, DIM.PA, DSV.CO, DSY.L, EDEN.PA, EXPN.L, FBK.MI, G24.DE, GMKN.ME, HDB, ICICIGI.NS, IMCD.AS, KGP.L, KNEBV.HE, KSPI.L, LMN.TO, LUN.TO, MC.PA, MELI, MIPS.ST, MNDY, NEX.PA, NVO, NVZMY, PDD, RAT.DE, RIO, ROG.SW, RYA.L, SALM.OL, SAP, SDZ.SW, SE, SEB-A.ST, SHOP.TO, SIMO, SJ.TO, SPOT, TFII, TOI.TO, TPRO.MI, TSM, U11.SI, UL | E-Commerce, growth, international, Quality, semiconductors, technology, value |
TME 005930 KS DSV LUN CN 8035 JP SALM NO 2454 TT |
Samsung Electronics passed qualification with Nvidia for HBM3E chips and is in advanced discussions for next-generation products. The memory division reported record third-quarter sales driven… |
| Oct 20 2025 | 2025 Q3 | DB1 GR, DSV DC, SEB, TCEHY, UOB SP | Artificial Intelligence, Asia, emerging markets, financials, industrials |
SEB UOB B3 SA SEB UOB |
The fund underperformed its benchmark amid weakness in European financials and industrials, offset by strength in Asian tech and Chinese internet holdings like Tencent and… |
| Jul 11 2025 | 2025 Q2 | - | conviction, disruption, innovation, International Growth, long-term | - | The letter highlights high-conviction international growth investing focused on companies reshaping industries through innovation. Management emphasizes patience through volatility, long time horizons, and willingness to… |
| Apr 18 2025 | 2025 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
CopperMarket shifted from deficit to surplus as Chinese demand stalled for first time in 25 years while supply expanded by 3 million tonnes since 2021. Exchange inventories reached 1.2 million tonnes, highest since 2003. Bearish outlook as China transitions from under-consuming to over-consuming copper. |
Base Metals China Inventories Surplus |
E-commerceThe portfolio maintains exposure to e-commerce platforms and enablement technologies through holdings like Amazon and Shopify. The fund views e-commerce as benefiting from secular shifts in consumer behavior and continued digital commerce adoption across retail categories. |
Platforms Digital Retail Consumer Technology | |
LogisticsDeutsche Post demonstrated resilience with strong performance following robust earnings despite tariff-related challenges, driven by robust pricing power and cost control. The diversified logistics company showcased the defensive characteristics of quality logistics operators in challenging environments. |
Pricing Power Cost Control Tariff Resilience Diversified Logistics Earnings | |
SemiconductorsMACOM Technology Solutions rose nearly +40% as the company experienced broad-based demand, similar to many semiconductor companies in 2025. The team exited Astera Labs following industry conference presentations that suggested emerging competitive risks and concerns over single customer concentration, while initiating a position in Credo Technology for AI-connectivity exposure. |
Demand Competition Connectivity Customer Concentration | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations | |
IndustrialsThe fund increased exposure to high-quality industrial businesses with potential for cyclical upturn. Added Quanta Services for AI data center build-out, Hubbell for electrical grid upgrades, Old Dominion for freight cycle recovery, and Waste Connections for secondary market focus. |
Infrastructure Automation Transportation Electrical Equipment Waste Management | |
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 15, 2026 | Fund Letters | Chris Davies | LUN CN | Lundin Mining Corporation | Materials | Copper | Bull | New York Stock Exchange | Copper, energy transition, Free Cash Flow, Mining, supply constraints | Login |
| Jan 15, 2026 | Fund Letters | Chris Davies | 8035 JP | Tokyo Electron Limited | Information Technology | Semiconductor Equipment | Bull | New York Stock Exchange | capital expenditure, Process Complexity, R&D, semiconductor equipment, Technology Cycles | Login |
| Jan 15, 2026 | Fund Letters | Chris Davies | SALM NO | SalMar ASA | Consumer Staples | Agricultural Products | Bull | Oslo Børs | Aquaculture, consolidation, Margins, Pricing power, Protein Demand | Login |
| Jan 15, 2026 | Fund Letters | Chris Davies | 2454 TT | MediaTek Inc. | Information Technology | Semiconductors | Bull | New York Stock Exchange | AI chips, cash generation, Fabless Semiconductors, Platform Diversification, Smartphones | Login |
| Oct 20, 2025 | Fund Letters | Chris Davies | SEB | Aktiebolaget Skandinaviska Enskilda Banken | Industrials | Banks | Bull | NYSE | banking, Lending, Nordics, profitability, stability, valuation | Login |
| Oct 20, 2025 | Fund Letters | Chris Davies | UOB | United Overseas Bank | Financials | Banks | Bull | NYSE | banking, Governance, Regional, stability, valuation | Login |
| Oct 20, 2025 | Fund Letters | Chris Davies | B3 SA | B3SA3 BZ | Financials | Financial Data & Stock Exchanges | Bull | Brasil Bolsa Balcão | Brazil, Exchange, Financial markets, growth, Interest rates, Monopoly | Login |
| Oct 20, 2025 | Fund Letters | Chris Davies | SEB | Aktiebolaget Skandinaviska Enskilda Banken | Industrials | Banks | Bull | NYSE | banking, Lending, Nordics, profitability, stability, valuation | Login |
| Oct 20, 2025 | Fund Letters | Chris Davies | UOB | United Overseas Bank | Financials | Banks | Bull | NYSE | banking, Governance, Regional, stability, valuation | Login |
| Jan 15, 2026 | Fund Letters | Chris Davies | TME | Tencent Music Entertainment Group | Communication Services | Interactive Media & Services | Bull | New York Stock Exchange | China Internet, Content Monetization, Scalability, Streaming, Subscriptions | Login |
| Jan 15, 2026 | Fund Letters | Chris Davies | 005930 KS | Samsung Electronics Co., Ltd. | Information Technology | Semiconductors | Bull | New York Stock Exchange | Ai Memory, Cyclical Recovery, HBM, Pricing power, semiconductors | Login |
| Jan 15, 2026 | Fund Letters | Chris Davies | DSV | DSV A/S | Industrials | Air Freight & Logistics | Bull | New York Stock Exchange | Freight Forwarding, Global trade, Logistics, margin expansion, synergies | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | Selected technology-related companies held across several of our funds contributed for the quarter, particularly established franchises such as Samsung Electronics and Alphabet (Google). While the shares of both companies soared upward in price during the year, we believe they remain reasonably valued relative to their near-term growth prospects. |
| 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. |
| 1299.HK | Proceeds were deployed to three Asian companies: 1) Alibaba Group Holding is the largest Chinese e-commerce and cloud company, which has stabilized its e-commerce business and invested in the growing cloud business; 2) Asian insurance company AIA Group Limited is leveraging growing demand from Hong Kong, China and other Asian countries; and 3) Chinese company Ping An Insurance may benefiting from the structural demand for health and protection products given the aging population and limited coverage of national insurance. |
| 1698.HK | After a strong run, shares in TME corrected sharply in the fourth quarter. Third-quarter results showed solid revenue growth, with non-subscription revenue rising 51% year-on-year, driven by concerts and merchandise. However, concerns emerged that this mix shift toward lower-margin revenues could dilute profitability, alongside rising competition and guidance for subscription growth to slow in 2026. The correction appears largely valuation-driven. We continue to view TME as a high-quality compounder with significant long-term monetization potential. |
| 2318.HK | Proceeds were deployed to three Asian companies: 1) Alibaba Group Holding is the largest Chinese e-commerce and cloud company, which has stabilized its e-commerce business and invested in the growing cloud business; 2) Asian insurance company AIA Group Limited is leveraging growing demand from Hong Kong, China and other Asian countries; and 3) Chinese company Ping An Insurance may benefiting from the structural demand for health and protection products given the aging population and limited coverage of national insurance. |
| 2454.TW | MediaTek is Taiwan's leading chip designer, forming a duopoly in the smartphone market with Qualcomm. Stable pricing and cash generation support the business, while artificial intelligence growth potential through its partnership with Google is underappreciated by the market. |
| 600519.SS | In the Consumer Staples sector, Kweichou Moutai and Inner Mongolia Yili were the strongest contributors to returns. |
| 6758.T | Sony |
| 7974.T | Shares of Nintendo dropped, weighed down by investor concerns that rising costs for its manufacturing parts, including memory chips, could negatively impact its profit. |
| 8035.T | Tokyo Electron did well in the quarter as related semiconductor production equipment companies also did well. |
| 8729.T | Japan's Sony Financial Group Inc. (spin-off from Sony Group) was also exited. |
| 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. |
| BNTX | BioNTech SE -14 |
| CFR.SW | Over the past twelve months, the top five positive contributors to the Fund's +2.0% return include Richemont |
| 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. |
| CSU.TO | Broad pressure on the stocks of software companies enabled us to initiate a position in Constellation Software. This is a unique business we had on our radar for a long time but were never able to purchase due to its high valuation. At its core, the company is a permanent capital vehicle designed to acquire 'vertical market software' (VMS) businesses and hold them indefinitely. |
| DSV.CO | DSV A/S was one of the top five winners for the quarter. |
| EXPN.L | Experian's shares were -1% in 2025. Consistent with much of the rest of the portfolio, operating results remain solid. The company will almost certainly report double-digit growth in earnings for 2025, and the company has met or exceeded investors' expectations for the year. The challenges have not so much been financial but hypothetical – focussed on AI's potential to change competitive dynamics in their industry. Experian is valued on a prospective 4.5% equity FCF yield. We have added to the Strategy's investments this year. |
| IMCD.AS | IMCD is a global leader in the marketing, sales and distribution of specialty chemicals and ingredients. The company is widely regarded as best-in-class, benefiting from a highly technical salesforce and extensive global scale. These strengths make IMCD a preferred partner, enabling it to drive consistent organic growth, enhance visibility across distribution channels, and streamline points of contact for customers and suppliers alike. IMCD specializes in the 'true specialties' area of the market, where chemicals or ingredients often have a material impact on end-product performance. That translates into significant pricing power and demand inelasticity – market features we find particularly attractive. Despite strong fundamentals, the stock price has fallen significantly due to a combination of cyclical downturn and market fears that we believe are overstated. This presented us with the opportunity to invest in a well-managed company with substantial M&A opportunities that we think should re-rate over the long term. |
| KSPI.L | As in the first half of the year (refer to our last investor letter), Kaspi's share price lagged in the second half of the year. Some market challenges in Kazakhstan only became visible in reported results during the latter half of the year, which resulted in more muted revenue and profit growth for Kaspi than what investors have historically been used to. New government smartphone registration requirements and iPhone shortages depressed e-commerce revenues (smartphones are a material revenue generator for most large online general merchandise retailers), whilst higher banking reserve requirements, a new tax on interest income and higher base rates payable on customer deposits depressed interest income on the banking side of the business. |
| LMN.TO | We have been net buyers of Lumine throughout this period. Lumine focuses on a large hybrid vertical spanning telecom and media and tends to pursue larger transactions, including complex corporate carve-outs where a proven integration playbook is critical. |
| LUN.TO | During the fourth quarter and full-year 2025, Lundin Mining and Capstone Copper provided two of the Fund's largest contributions to performance. We have been optimistic, over a long holding period for both companies, that the indispensable nature of copper to modern economies and the exceptional difficulty of maintaining current global supply would become better appreciated. During the last couple of years, we would say that a growing awareness has begun. |
| MC.PA | The holdings in Applied Materials, Elevance Health, LVMH and Anheuser-Busch InBev were exited |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| MNDY | Monday.com detracted from relative quarterly performance |
| NVO | I sold Novo Nordisk (NVO) after a very brief period of ownership due to what appeared to be a disadvantageous competitive situation after further diligence. Eli Lilly (LLY) is much more highly valued than NVO, which initially attracted me to NVO as a value investor, but further investigation has revealed LLY has a superior product (for now). While NVO has been first to market with an oral GLP-1, it is likely only a matter of time before LLY brings a similar option to market. NVO may take an aggressive approach to pricing to access more customers and compete with LLY, but LLY's advantage is likely to persist and I felt there were better alternatives for the capital. |
| PDD | Notable portfolio actions during the quarter included switching the holdings in Alibaba and Pinduoduo into a larger position in Naspers |
| ROG.SW | Holdings such as Roche, Novartis, and Ionis Pharmaceuticals benefited from new drug approvals, steady and growing earnings, and business models that continue to generate cash through a wide range of economic conditions. We also trimmed several larger holdings, including Roche, Novartis, Safran, and TotalEnergies, whose stock prices had approached underlying intrinsic value. |
| RYA.L | After posting an in-line September quarter and providing a better-than-expected outlook for the holiday travel season based on forward bookings, Ryanair outlined a bullish long-term outlook. Based on continued industry capacity constraints and the company's widening unit cost advantage, Ryanair believes it can raise fares while maintaining its significant value gap to competitors and increase net profit per passenger from €10 today to €12 to €14 over the next decade. |
| SALM.OL | Salmar is a leading Norwegian salmon farmer in an industry growing at a high single-digit rate. Lower production costs from superior farming locations support higher margins. As smaller competitors face cost and regulatory pressures, Salmar is well placed to consolidate the market. |
| SAP | We trimmed SAP SE. |
| SE | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| SHOP.TO | Non dividend paying technology names Shopify and Celestica had also meaningful contribution to the index returns for the year, detracting our relative outcome. |
| SIMO | Silicon Motion showed sustained strength in 2025, with revenue growing about 8% over the year, gross margin expanding further to about 49% (from about 46% in 2024), and double-digit growth in operating income. We continue to believe that Silicon Motion is a very good deal for the long term at these price levels, as they consolidate and expand their market share position and enter new, lucrative market segments. |
| 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. |
| TOI.TO | Detracting from performance were holdings of Constellation Software and spinoff Topicus despite strong underlying earnings amid concerns that AI could affect their software offerings |
| TSM | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| UL | Unilever is a global consumer goods company that develops and markets everyday food and personal care brands for billions of consumers worldwide. Anchored by iconic brands such as Dove, Knorr, Hellmann's and Vaseline, Unilever's refreshed management team is driving improved execution and strategic discipline to deliver more consistent growth, with a focus on higher-margin categories. Specifically, we appreciate their undertaking of various self-help initiatives, including cost-savings programs and brand divestments, which we believe will help unlock sustained value in the future. Despite Unilever's strong outlook, it trades at a discount to its peer group as prior undermanagement has resulted in 1% volume growth for the past decade. This provided us the opportunity to invest in a strong company with leading brands and an improved management team that is poised to increase per-share value. |
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