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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Baillie Gifford -Emerging Markets. This analysis is provided for institutional research purposes only and is not investment advice.
"The Baillie Gifford Emerging Markets Equities Fund outperformed its benchmark in Q2 2025, propelled by strong execution in TSMC and MercadoLibre. The fund added exposure to Chinese EV battery manufacturer CATL and autonomous driving developer Pony.ai, maintaining a five-year investment lens focused on global structural growth themes."
The Baillie Gifford Emerging Markets Equities Fund delivered strong performance in Q2 2025, returning 12.21% (K Class), outperforming its MSCI Emerging Markets Index benchmark (12.20%). Performance was anchored by bottom-up operational execution across core holdings, notably MercadoLibre and TSMC, alongside positive asset selection in technology and e-commerce. Key performance drag stemmed from commodity-exposed holdings, including Petrobras and SQM, which suffered from global oil price volatility and lithium oversupply, respectively. Geographically, underweight positioning in Saudi Arabia aided relative returns, while an underweight position in South Korea detracted amid the 'Value-Up' rally. The fund initiated two new positions during the quarter: Chinese battery leader CATL via its Hong Kong IPO and autonomous vehicle developer Pony.ai. The team remains committed to a long-term five-year growth strategy, focusing on companies with dominant competitive moats, strong balance sheets, and exposure to structural trends such as artificial intelligence, energy transition, and domestic emerging market consumption.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The score of 0.70 reflects high conviction supported by detailed stock-specific analyses for core positions and new purchases like CATL and Pony.ai. While the portfolio holds 77 stocks across 19 geographies, positioning is anchored by large weights in top holdings such as TSMC (12.91%).
Growth Outlook
A score of 0.70 is assigned because the fund sees strengthening fundamental cases for emerging markets, driven by easing currency pressures, strong domestic growth, a weaker US dollar, and globally relevant companies.
Risk Appetite
The fund maintains a risk-on growth tilt with cash near historic lows (1.00%) and new allocations to high-beta early-stage commercial tech like autonomous driving, offset slightly by willingness to hold cyclical energy names.
Capital Deployment
Capital deployment is high with 99% invested (1.00% cash) and two new long positions added during the quarter, with zero complete sales.
Forward Guidance
The score reflects active, selective deployment into emerging growth opportunities and market leaders via IPO participation and direct bottom-up engagement.
Language Signal
The text relies heavily on positive directional phrasing such as 'market leadership,' 'defensible growth,' 'strong operational results,' and 'attractive unit economics,' acknowledging macro risks as temporary noise.
Perceived Risk
The score reflects acknowledged geopolitical conflicts in the Middle East, trade tariffs, and lithium/oil commodity volatility, balanced by the fund's confidence in portfolio company resilience.
Opportunity Density
The team highlights broad investable opportunities across AI infrastructure, decarbonization, digital consumer platforms, and commercial robotaxis across Asia and Latin America.
Time Horizon
The fund explicitly defines a 5-year investment horizon, emphasizing long-term growth and willingness to look past short-term earnings noise and commodity cycles.
