Positive Change Q2 investment update

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<p class="MsoNormal"><strong>Your capital is at risk. Past performance is not a guide to future returns.</strong></p> <p class="MsoNormal">&nbsp;</p> <p class="MsoNormal"><strong>Edward Whitten:</strong> Markets are increasingly being shaped by short-term sentiment. Share prices move quickly. Momentum builds quickly. Attention can concentrate around a small group of companies and themes.</p> <p class="MsoNormal">That creates risk. It can make markets feel more unsettled, and performance uneven over shorter periods. But it can also create opportunity.</p> <p class="MsoNormal">Positive Change outperformed the global index this quarter. We always hesitate to draw conclusions from such short periods, but it’s encouraging that our global impact strategy can keep pace with markets, while also retaining a much broader opportunity set.</p> <p class="MsoNormal">However, we should also recognise that longer-term performance remains challenging. Our priority is to repair the longer-term track record. The way to do that is through sustained evidence of company progress, disciplined decision-making and careful portfolio construction.</p> <p class="MsoNormal">When markets focus too narrowly on what is already working, they can miss long-term opportunities. In this environment, three things continue to guide our work.<br>First, philosophical consistency. We continue to invest in companies we believe can deliver attractive long-term growth by helping to address important social and environmental challenges.</p> <p class="MsoNormal">We published our ninth annual Impact Report this quarter. For clients, this is one of the clearest ways to understand the positive impact their investments are having.</p> <p class="MsoNormal">Through the products and services they provide, the companies in the portfolio are estimated to have given 342 million people access to education or training. They’ve helped customers save 927 billion litres of water, provided treatment or disease management solutions to over one billion patients, and given 570 million people access to financial services.</p> <p class="MsoNormal">These figures help us test whether the companies we own are genuinely contributing to positive change, and whether that contribution is linked to a durable business opportunity.</p> <p class="MsoNormal">The second point guiding our work is resilience. We want the portfolio to be built from strong businesses, with robust finances, pricing power and the ability to adapt.</p> <p class="MsoNormal">Artificial Intelligence has been one of the clearest examples of where market attention has concentrated. But we do not think the opportunity is simply to own anything connected to AI. The important question is where durable value may accrue.</p> <p class="MsoNormal">Our preference has been for critical enablers: companies whose technologies sit underneath the AI buildout, and whose success is not dependent on a single model, application or a single version of the future.</p> <p class="MsoNormal">ASML, Arm and TSMC are good examples of this. ASML produces the machines that make advanced chip manufacturing possible. Arm designs the chip architecture, and TSMC manufactures those advanced chips.</p> <p class="MsoNormal">These companies were among the strongest contributors this quarter. Their performance has reflected clear competitive advantages, strong operational delivery, and the market’s growing recognition of how essential they are to the next phase of computing and the benefits that should bring to the world.</p> <p class="MsoNormal">But portfolio resilience also requires discipline on position sizing. After strong share-price performance, we trimmed Arm, TSMC and ASML. While we retain conviction in these companies, our trims keep our exposure to AI infrastructure deliberate.</p> <p class="MsoNormal">We also initiated a position in KLA this quarter. This provides another critical component in the semiconductor value chain. Its process control tools help chipmakers improve yields, reducing defects, waste, water use and energy intensity. KLA is a great example of where the investment case and impact case are closely connected.</p> <p class="MsoNormal">Now, the third point is opportunity. In concentrated, momentum-driven markets, some areas are rewarded very strongly, while other exciting areas of growth are overlooked. Our job is to be selective, not reactive.</p> <p class="MsoNormal">Healthcare is one example here. The sector has been out of favour, and that has weighed on some holdings, but we continue to see significant long-term progress and innovation.</p> <p class="MsoNormal">We used weakness in the sector as an opportune moment to buy Edwards Lifesciences, a pioneer in minimally invasive heart therapies. Its products offer an alternative to open-heart surgery, addressing a serious health need where we believe the market is underappreciating the durability of growth.</p> <p class="MsoNormal">We also initiated positions in Intuit and Circle, where short-term pressures have created uncertainty, but where we see significant long-term opportunity.</p> <p class="MsoNormal">Intuit helps individuals and small businesses manage tax, accounting, payroll and financial decisions. Circle provides stablecoin infrastructure that could make digital money movement faster and cheaper, particularly in middle- and low-income countries.</p> <p class="MsoNormal">We cannot predict which companies will lead markets next quarter. But we do know what we are looking for: those whose progress can support attractive long-term returns and contribute to a more sustainable, more inclusive and healthier world.</p> <p class="MsoNormal">That remains the purpose of Positive Change.</p> <h3>Past performance</h3> <p><strong>Annual past performance to 30 June each year (%)</strong></p> <table border="1" style="border-collapse: collapse; width: 100%; border-width: 0px; height: 75.1248px;"> <tbody> <tr style="height: 18.7812px;"> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.7812px; width: 25.4694%;">&nbsp;</td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.7812px; width: 14.9582%; text-align: right;"><strong>2022</strong></td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.7812px; width: 14.9582%; text-align: right;"><strong>2023</strong></td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.7812px; width: 14.9582%; text-align: right;"><strong>2024</strong></td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.7812px; width: 14.9582%; text-align: right;"><strong>2025</strong></td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.7812px; width: 14.554%; text-align: right;"><strong>2026</strong></td> </tr> <tr style="height: 18.7812px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7812px; width: 25.4694%;">Positive Change Composite (gross)</td> <td width="14%" valign="bottom" style="width: 14.9582%; border: 1pt solid rgb(204, 204, 204); padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">-38.0</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">25.0</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">2.5</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">18.5</p> </td> <td width="14%" valign="bottom" style="width: 14.554%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">12.9</p> </td> </tr> <tr style="height: 18.7812px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7812px; width: 25.4694%;">Positive Change Composite (net)</td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204); padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">-38.4</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">24.3</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">1.9</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">17.9</p> </td> <td width="14%" valign="bottom" style="width: 14.554%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">12.3</p> </td> </tr> <tr style="height: 18.7812px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7812px; width: 25.4694%;">MSCI ACWI Index</td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204); padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">-15.4</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">17.1</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">19.9</p> </td> <td width="14%" valign="bottom" style="width: 14.9582%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">16.7</p> </td> <td width="14%" valign="bottom" style="width: 14.554%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 14.1pt; text-align: center;"> <p class="MsoNormal">24.2</p> </td> </tr> </tbody> </table> <p>&nbsp;</p> <p><strong>Annualised returns to 30 June 2026 (%)</strong></p> <table border="1" style="border-collapse: collapse; width: 100%; border-width: 0px; height: 92.5px;"> <tbody> <tr style="height: 37px;"> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 37px; width: 44.8747%;">&nbsp;</td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 37px; width: 14.2844%; text-align: right;"><strong>1 year</strong></td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 37px; width: 16.5753%; text-align: right;"><strong>5 years</strong></td> <td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 37px; width: 24.2566%; text-align: right;"><strong>Since inception</strong></td> </tr> <tr style="height: 18.5px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px; width: 44.8747%;">Positive Change Composite (gross)</td> <td width="14%" style="width: 14.2844%; border: 1pt solid rgb(204, 204, 204); padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;12.9</p> </td> <td width="16%" style="width: 16.5753%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;1.2</p> </td> <td width="24%" style="width: 24.2566%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;17.1</p> </td> </tr> <tr style="height: 18.5px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px; width: 44.8747%;">Positive Change Composite (net)</td> <td width="14%" style="width: 14.2844%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204); padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;12.3</p> </td> <td width="16%" style="width: 16.5753%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;0.7</p> </td> <td width="24%" style="width: 24.2566%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">16.4&nbsp;</p> </td> </tr> <tr style="height: 18.5px;"> <td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.5px; width: 44.8747%;">MSCI ACWI Index</td> <td width="14%" style="width: 14.2844%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204); padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;24.2</p> </td> <td width="16%" style="width: 16.5753%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;11.5</p> </td> <td width="24%" style="width: 24.2566%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor rgb(204, 204, 204) rgb(204, 204, 204) currentcolor; padding: 7.5pt 7.5pt 7.5pt 0.75pt; height: 13.9pt; text-align: center;"> <p class="MsoNormal">&nbsp;13.1</p> </td> </tr> </tbody> </table> <p><span class="source-text" lang="EN-US">Source: Revolution, MSCI. USD. Net returns have been calculated by reducing the gross return by the highest annual management fee for the composite. Since Inception: 3 January 2017. 1 year figures are not annualised.</span></p> <p><span class="source-text" lang="EN-US">Positive Change composite is more concentrated than MSCI ACWI Index.&nbsp;</span></p> <p><strong>Past performance is not a guide to future returns.</strong></p> <p>Legal notice: MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.</p> <h3>Risk factors and important information</h3> <p>The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.</p> <p>This communication was produced and approved in July 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.</p> <h3>Potential for Profit and Loss</h3> <p>All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.</p> <p>This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.</p> <p>All information is sourced from Baillie Gifford &amp; Co and is current unless otherwise stated.</p> <p>The images used in this communication are for illustrative purposes only.</p> <h3>Important Information</h3> <p>Baillie Gifford &amp; Co and Baillie Gifford &amp; Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford &amp; Co Limited is an Authorised Corporate Director of OEICs.</p> <p>Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford &amp; Co. Baillie Gifford &amp; Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK.</p> <p>Persons resident or domiciled outside the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances.</p> <h3>Financial Intermediaries</h3> <p>This communication is suitable for use of financial intermediaries. Financial intermediaries are solely responsible for any further distribution and Baillie Gifford takes no responsibility for the reliance on this document by any other person who did not receive this document directly from Baillie Gifford.</p> <p><span class="source-text">200301 10064100</span></p>