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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Baillie Gifford - International Alpha 2025 Q2 Investor Letter | Buyside Digest

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Primary Source Intelligence • Q2 2025 Letter Analysis

Baillie Gifford - International Alpha Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Baillie Gifford - International Alpha. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+14%

YTD+19%

Annualized+7.45%

Positioning StanceCONSTRUCTIVE

Digest Analysis

Quick Take

"The Baillie Gifford International Alpha Fund delivered robust Q2 2025 performance, outperforming its MSCI ACWI ex US benchmark driven by top contributors MercadoLibre and Ryanair."

Executive Summary

The Baillie Gifford International Alpha Fund seeks to achieve long-term capital appreciation through a bottom-up, fundamental research-driven stock picking strategy focused on quality growth companies. In the second quarter of 2025, the strategy delivered strong absolute and relative performance, outperforming the MSCI ACWI ex US Index benchmark. Outperformance was primarily driven by strong operational momentum in Latin American e-commerce leader MercadoLibre and effective cost management alongside strong passenger volume at European airline Ryanair. Conversely, Chinese food delivery platform Meituan and Kazakh fintech provider Kaspi detracted from short-term performance due to competitive price wars and local economic software/interest rate pressures, respectively. During the quarter, the investment team initiated new holdings in PDD Holdings, Sandoz Group, and Unicharm, while fully exiting positions in Ambu, Nestle, Nidec, and Oxford Nanopore due to broken investment theses or limited valuation upside. Management remains constructive on international equities, viewing global market dispersion and trade policy uncertainties as an attractive environment for dynamic long-term stock selection.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

65%

CautiousHigh

Moderate (65%)

The fund maintains a moderately concentrated portfolio of 77 holdings with explicit stock-level rationale provided for major purchases and sales. While individual position sizes in top holdings like TSMC (4.6%) and MercadoLibre (4.24%) demonstrate strong commitment, the portfolio's broad allocation across 77 names reflects a moderate level of concentration.

Growth Outlook

65%

BearishBullish

Bullish (65%)

The manager expresses optimism regarding international equities benefiting from a multipolar economic environment with dynamic, attractively valued opportunities. However, caution is expressed regarding near-term tariff-related headwinds and corporate earnings uncertainty.

Risk Appetite

65%

DefensiveAggressive

Balanced (65%)

Capital positioning remains net long across international quality growth equities with a low cash allocation of 1.36%. The team selectively initiated new growth positions in PDD and Sandoz while exiting names with broken theses or full valuations.

Capital Deployment

65%

De-riskingDeploying

Net Neutral (65%)

The fund engaged in active portfolio recycling by establishing three new holdings and liquidating four positions, while keeping cash at a low 1.36% level.

Forward Guidance

65%

CautiousExpansionary

Expansionary (65%)

The team actively deployed capital into three new positions (Sandoz, Unicharm, PDD Holdings) and fully exited four underperforming or fully valued stocks, demonstrating an active posture toward recycling capital into high-conviction ideas.

Language Signal

70%

BearishBullish

Bullish (70%)

The document utilizes positive terminology such as 'formidable moat,' 'attractive valuation,' 'resilient,' and 'underappreciated,' while clearly acknowledging competitive headwinds and macro uncertainty across specific holdings.

Perceived Risk

55%

Low RiskElevated

Moderate Risk (55%)

The manager explicitly notes near-term trade policy uncertainties, price competition in Chinese delivery markets, and macroeconomic softness in emerging markets, but treats these as manageable cyclical or operational factors.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

The manager highlights a vast, dynamic, and attractively valued opportunity set within international equities, identifying attractive entry points across diverse sectors including healthcare generics, Chinese social commerce, and Japanese personal care.

Time Horizon

85%

Short-TermLong-Term

Decade+ (85%)

The fund explicitly stresses a long-term investment horizon, backed by an average partner service tenure of 20 years and five-year holding period return expectations. Investment decisions are based on multi-year structural compounding rather than short-term trading catalysts.