| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.06% | -5.1% | -5.1% |
Baillie Gifford International Alpha Fund managers express genuine conviction and optimism despite recent underperformance, positioning the fund as better than ever with faster growth, attractive valuations, and enhanced resilience. The fund's premium to the MSCI ACWI ex US Index sits at its lowest since 2010, historically a precursor to strong returns. The managers have actively adapted to structural shifts including AI disruption, deglobalization, and higher uncertainty by building exposure to banks and financial infrastructure, copper miners, energy supply chains, and AI enablers while exiting positions where growth theses have weakened. Key themes include the structural copper deficit lasting a decade, AI as a multi-year supercycle, and energy security becoming paramount in a deglobalizing world. The fund added positions in CATL, Petrobras, Zijin Mining, and SoftBank while selling Meituan, Novo Nordisk, and several software names facing AI disruption. Fund turnover increased as managers pursued opportunities created by market dislocation. The team maintains confidence that operational strength will translate to share price performance as markets refocus on fundamentals.
The Fund is better positioned than at any point in the past fifteen years through a combination of faster growing companies, more attractive valuations, and greater resilience to volatility, with its premium to the MSCI ACWI ex US Index at the lowest level since 2010.
The fund is faster growing today, more attractively valued, and more resilient than at any point in recent memory, with its premium to the index at its lowest since 2010. Starting points like this have historically preceded strong returns. We remain confident that, as markets refocus on fundamentals, the operational strength of the companies you own will translate into share price performance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 18 2026 | 2026 Q1 | 005930 KS, 0700.HK, 1299 HK, 2454.TW, 2899.HK, 300750.SZ, 8316.T, 9984.T, ADYEN.AS, ASML, B3SA3.SA, DB1.DE, DSV.CO, EXPN.L, LUN.TO, MELI, PBR, RIO, RYA.L, SAP, SHOP.TO, TSM, TTE | AI, banks, Copper, energy, growth, international, semiconductors, volatility | - | Baillie Gifford positions their International Alpha Fund as better than ever despite recent underperformance, with the lowest valuation premium since 2010. They've actively adapted to structural shifts by adding exposure to copper miners, energy companies, and AI enablers while exiting software names facing disruption. The fund benefits from faster growth, attractive valuations, and enhanced resilience heading into a complex global environment. |
| 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 |
Baillie Gifford International Alpha underperformed in Q4 despite positive returns, with semiconductor plays Samsung and Tokyo Electron driving gains while Latin American e-commerce platform MercadoLibre faced competitive pressures. The team added quality names in copper mining, salmon farming, and chip design while exiting weaker conviction positions, positioning for improved fundamentals-driven performance in 2026. |
| Oct 20 2025 | 2025 Q3 | 005930.KS, 0700.HK, 6954.T, B3SA3.SA, DB1.DE, DSV.CO, RELIANCE.NS, SEBA.ST, TSLA, U11.SI | AI, Asia, Europe, Exchanges, growth, international, semiconductors, technology |
SEB UOB B3 SA SEB UOB |
Baillie Gifford's International Alpha Fund lagged benchmarks despite strong AI-driven performance from Tencent and Samsung Electronics. The fund strategically added exchange operator B3 and quality banks SEB and UOB while exiting underperforming positions. Management remains confident in long-term fundamentals despite near-term headwinds from European stock selection and macro uncertainty affecting freight and industrial names. |
| Jul 11 2025 | 2025 Q2 | - | - | - | |
| Apr 18 2025 | 2025 Q1 | NVO, UL | China, Europe, growth, international, Quality, technology, valuation | NVO | International equities broke their 13-year underperformance streak in Q1 2025, led by Europe's fiscal stimulus and China's regulatory improvements. The manager opportunistically bought Novo Nordisk after its 50% decline, capitalizing on the GLP-1 obesity opportunity. Portfolio diversification across growth flavors provides resilience for expected continued market volatility ahead. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAI is described as the most consequential technological shift of a generation, driving energy demand and creating opportunities across the value chain. The fund maintains exposure to critical AI enablers while adding broader exposure through companies like MediaTek and SoftBank. AI is also compressing software development costs and automating knowledge work, creating both threats and opportunities for software companies. |
Semiconductors Software Energy Automation Infrastructure |
Energy TransitionThe fund is building exposure to global energy supply chains from production to transmission via electrification. Holdings include CATL for battery leadership, Petrobras for growing oil production, and companies positioned for multi-decade electricity transmission infrastructure upgrades. Energy security has become a structural feature of a deglobalizing world. |
Batteries Oil Infrastructure Electrification Security | |
CopperA structural copper deficit is projected to persist for the better part of a decade, with hundreds of new mines needed to meet demand from grid upgrades, reshored facilities, and new infrastructure projects. The fund has added dedicated copper exposure through Lundin Mining and Zijin Mining, both selected for idiosyncratic characteristics on top of the structural tailwind. |
Mining Infrastructure Supply Deficit Demand | |
OnshoringGlobalization is reversing as every country pursues energy independence, semiconductor self-sufficiency, and domestic manufacturing capacity. This creates enormous capital-intensive demand for physical inputs and sustained tailwinds for suppliers of capital. Every duplication of supply chains and reshoring decision represents friction and costs. |
Manufacturing Infrastructure Capital Supply Chains Independence | |
Capital MarketsWhen risk premiums rise, capital becomes scarcer, and businesses that provide and allocate capital earn structurally higher returns. The fund has added exposure across banking franchises and financial market infrastructure. Stock exchange operators like Deutsche Börse and B3 benefit from elevated trading activity and volatility. |
Banks Exchanges Risk Returns Infrastructure | |
| 2025 Q4 |
SemiconductorsSamsung 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 by AI demand. Tokyo Electron was added as a new position given its strong competitive position in semiconductor equipment. |
Memory AI Chips Equipment HBM DRAM |
AISamsung's qualification for Nvidia's HBM3E chips represents a key milestone in AI infrastructure. MediaTek offers significant AI growth potential through its partnership with Google to design custom AI chips, with management forecasting one billion dollars in revenue next year growing to several billion by 2027. |
Infrastructure Custom Chips Memory Growth | |
E-commerceMercadoLibre faced share price volatility reflecting concerns over short-term margin pressure despite strong revenue growth. The market focused on costs of defending market share in Brazil amid intense competition and some deterioration in consumer credit quality. |
Latin America Competition Margins Credit | |
LogisticsDSV shares rebounded after geopolitical pressure on global trade. Third-quarter results exceeded expectations with margin improvement and upgraded guidance on DB Schenker acquisition synergies. Management accelerated integration timeline with most savings expected within two years. |
Freight Acquisition Synergies Integration | |
CopperLundin Mining was added as a new position, described as a high-quality copper-focused miner with low-cost assets and strong production growth potential. The current valuation does not account for company quality and improving demand-supply balance in copper. |
Mining Supply Demand Valuation | |
| 2025 Q3 |
AIArtificial Intelligence remained a dominant theme with several perceived beneficiaries rallying. Tencent is emerging as a clear beneficiary of AI, deploying it for more efficient game production and more effective targeted advertising. Samsung Electronics benefited from AI-related demand, particularly in advanced High Bandwidth Memory chips. |
Gaming Advertising Memory Semiconductors Technology |
Semiconductor CycleSamsung Electronics benefited from a tightening memory cycle with Dynamic Random Access Memory pricing being supportive. The company made operational progress in advanced High Bandwidth Memory chips, demonstrating competitiveness in this area and marking it as a key beneficiary of growing semiconductor intensity. |
Memory DRAM HBM Technology Cyclical | |
Capital MarketsThe fund made investments in exchange operators including B3, Brazil's stock and derivatives exchange, which enjoys a near-monopoly position and long growth runway driven by development of Brazilian capital markets. Deutsche Börse was noted as having diverse revenue streams spanning data, indices, and post-trade services. |
Exchanges Trading Brazil Germany Infrastructure | |
| 2025 Q1 |
GLP1Novo Nordisk represents a major growth opportunity through their GLP-1 drugs, particularly semaglutide marketed as Ozempic for diabetes and Wegovy for obesity. The obesity treatment market presents massive global growth potential over the next 10 years, especially in the US market. |
Obesity Diabetes Semaglutide Pharmaceuticals Healthcare |
Defense SpendingEuropean defense sentiment is rising significantly, with defense stocks performing very strongly during the quarter. This reflects broader European Union realization that increased spending is needed across defense and infrastructure areas. |
Defense Europe Infrastructure Government Spending | |
Infrastructure SpendingEurope is experiencing renewed excitement about fiscal stimulus, including Germany's 500 billion euro infrastructure fund. There is broader European Union recognition that more spending needs to happen across infrastructure and defense areas. |
Fiscal Stimulus Europe Government Spending Infrastructure |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
| 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 |
| Apr 1, 2025 | Fund Letters | Baillie Gifford - International Alpha | NVO | Novo Nordisk A/S | Health Care | Pharmaceuticals | Bull | NASDAQ | Biotech, Diabetes, Europe, GLP-1, growth, healthcare, Obesity, pharmaceuticals, semaglutide, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| TSM | TSMC saw sustained demand for leading-edge capacity, with management describing AI as a multi-year supercycle. Both remain core holdings, though we have trimmed positions after exceptionally strong runs to recycle capital into a broader set of opportunities. |
| 005930.KS | Samsung Electronics continued to benefit from the memory upcycle, with AI-driven demand for high bandwidth memory (HBM) and advanced packaging reinforcing its position across the value chain. Both remain core holdings, though we have trimmed positions after exceptionally strong runs to recycle capital into a broader set of opportunities. |
| 0700.HK | Tencent Music Entertainment halved after management flagged slowing subscriber growth and intensifying competition. We do not dismiss the competitive risks, but a business still growing revenue at the rate Tencent Music is warrants more patience than the market has shown. |
| RIO | Rio Tinto contributed positively as elevated commodity prices and accelerating energy transition demand reinforced the value of scarce physical assets. |
| DB1.DE | Deutsche Börse contributed meaningfully as exchanges benefited from elevated trading activity, with B3 further supported by Brazil's resilience as a commodity-exporting economy. |
| B3SA3.SA | B3 contributed meaningfully as exchanges benefited from elevated trading activity, with B3 further supported by Brazil's resilience as a commodity-exporting economy. |
| ADYEN.AS | Adyen, the Dutch payment company, is the clearest case in point. The business trimmed its 2026 revenue growth outlook modestly, and the shares sold off sharply, despite transaction volumes, take rates, and merchant retention all remaining robust. Agentic commerce may yet prove to be another acquisition channel for Adyen's merchants rather than a threat to the payment rails themselves. |
| RYA.L | The Middle East escalation sharpened a second theme: energy security and resource scarcity. The immediate risk-off move hit oil-importing economies and exposed businesses like european low-cost airline Ryanair to indiscriminate selling, despite its hedging position and structural cost advantages. |
| LUN.TO | Lundin is owned by the Lundin family, whose alignment with long-term shareholders and disciplined capital allocation set it apart from most mining peers; its assets in Chile are among the best in the industry, and its nascent Vicuna mine could add 50% to group volumes in 10 years. Petrobras, Rio Tinto, Lundin Mining, and CATL all contributed positively as elevated commodity prices and accelerating energy transition demand reinforced the value of scarce physical assets. |
| PBR | Petrobras is a Brazilian oil company growing production at 3-4% per annum from its low-cost, low-carbon pre-salt reserves, where it has world-class deep-water technical expertise built over decades. Over the last few years, governance and the treatment of minority shareholders has improved materially, with changes to the articles of association that limit government interference in operational and pricing decisions, and an explicit commitment to returning capital to shareholders. |
| 300750.SZ | CATL is a Chinese battery manufacturer and the global leader in EV batteries and energy storage systems (ESS), holding approximately 40% market share in China and 35% globally. The company's competitive advantage is built on exceptional R&D depth, manufacturing scale, and vertical integration from lithium mines through recycling, delivering significant cost advantages versus international peers, and consistent returns through market cycles. |
| 2454.TW | We have taken profits from names that have been rewarded for exceptional execution and strong growth delivery — reducing Samsung, TSMC, and Technoprobe — and recycled that capital into a broader set of companies that have been left behind by the market but are well positioned to benefit from many of the same structural growth drivers. We continue to back the critical enablers of Al where the long-term structural growth opportunity is most evident, while adding exposure throughout the Al value chain with stocks like the fabless semiconductor company MediaTek and SoftBank. |
| 9984.T | Softbank is a Japanese holding company with significant exposure to the Artificial Intelligence (AI) value chain. Key investments include ARM Holdings, a global leader in chip design, OpenAI, a leading private generative AI business, and various robotics businesses, including Boston Dynamics and the recently acquired subsidiary from ABB. Masayoshi Son, the majority owner and strategic mastermind of Softbank, has a track record of identifying technological trends early, generating alpha through long-term, high-conviction investments across both private and public equities, and well-timed portfolio evolution. |
| 8316.T | Sumitomo Mitsui Trust Group (SMTG) is Japan's leading trust bank, providing investment and custody services alongside traditional lending activities. Unlike other major Japanese banks, fees form most of SMTG's revenue. We expect SMTG to perform well over the coming years for the following reasons. First, further interest rate rises from the current low base will directly feed into wider lending spreads. Second, we are seeing a steady shift of savings into investments, creating significant opportunities for SMTG's asset management and custody business. |
| TTE | TotalEnergies is a French integrated energy company and, in our view, the highest-quality single-stock exposure to the global energy sector. The business operates across three complementary pillars: a world-class exploration and production (E&P) portfolio with 11-12 years of proved reserves, an exceptionally low cash breakeven of $20-25 per barrel, and 3-4% annual production growth locked in through the end of the decade. |
| 2899.HK | Zijin's track record speaks for itself: it is the only copper miner in the world to have exceeded mined copper production guidance for five consecutive years. Its scale allows it to operate at the lowest end of the cost curve, creating a structural advantage. |
| SAP | We believe several of the longstanding software names are well positioned, however: businesses with genuine distribution advantages, trusted customer relationships, and proprietary data can deploy AI as a lever rather than face it as a threat. Within software companies, we retain high conviction in SAP, Experian, and Shopify: each benefits from strong barriers to entry and a defensible position relative to AI disruption. |
| EXPN.L | We believe several of the longstanding software names are well positioned, however: businesses with genuine distribution advantages, trusted customer relationships, and proprietary data can deploy AI as a lever rather than face it as a threat. Within software companies, we retain high conviction in SAP, Experian, and Shopify: each benefits from strong barriers to entry and a defensible position relative to AI disruption. |
| SHOP.TO | We believe several of the longstanding software names are well positioned, however: businesses with genuine distribution advantages, trusted customer relationships, and proprietary data can deploy AI as a lever rather than face it as a threat. Within software companies, we retain high conviction in SAP, Experian, and Shopify: each benefits from strong barriers to entry and a defensible position relative to AI disruption. |
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