International Concentrated Growth: our philosophy

View transcript

<p><strong>As with any investment, your capital is at risk.</strong></p> <p><strong>Lawrence Burns:</strong></p> <p>Equity markets are not a level playing field. Over the last three decades, fewer than 0.25 per cent of stocks generated half of all net wealth created in international markets. That extreme distribution tells us something important: over time, only a very small number of exceptional companies truly matter. That’s because equities have asymmetric payoffs. The downside is mathematically bounded by the amount of capital invested, but the upside can potentially be a large multiple of that investment.</p> <p>That structure enables the extreme skew in equity markets. The opportunity is to find those rare positive outliers – and stay invested long enough for compounding to do its work. Our International Concentrated Growth Strategy is designed to do just that, to identify and then hold on to&nbsp;outlier businesses for the long term. International equities give us a rich and varied hunting ground to do that across countries, industries and stages of development.</p> <p>Emerging economies add an extra dimension: rising incomes, urbanisation and technological leapfrogging that can drive powerful growth and help create distinctive local champions. And because different markets specialise in different industries, a broad international remit helps us focus on the very best growth opportunities across a wide range of businesses. Capturing outlier payoffs demands long-termism. Many of the most rewarding companies take years to reshape industries – and almost all experience drawdowns along the way.<br><br>At Baillie Gifford, our partnership structure supports patience through volatility, aligns incentives with multi-year outcomes&nbsp;and gives us the freedom to let winners run – looking beyond today’s noise to tomorrow’s cash flows.&nbsp;</p> <p>Because outliers are rare, we run a deliberately concentrated portfolio – typically 20 to 35 holdings. We size positions around our view of long-term upside and downside across a range of scenarios, taking into account the breadth of possible outcomes and where we believe we have genuine insight. Finding tomorrow’s outliers requires us to think and behave differently. We draw on networks of visionary founders, private-company entrepreneurs, and academics, giving us different perspectives to identify businesses with the potential to compound value far beyond what the market expects today. In short: optimism to recognise potential, focus to select the exceptional few, patience to hold them through fluctuations.</p> <p>That is how International Concentrated Growth aims to harness the power of outliers for our clients, today and over the long run.</p> <p class="MsoNormal">&nbsp;</p> <h3 data-gtm-vis-recent-on-screen934959_1669="1806" data-gtm-vis-first-on-screen934959_1669="1806" data-gtm-vis-total-visible-time934959_1669="100" data-gtm-vis-has-fired934959_1669="1">Risk factors</h3> <p>This communication was produced and approved in March 2026 and has not been updated subsequently. It represents views held at the time and may not reflect current thinking.</p> <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 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> <p><span><strong>Important Information&nbsp;</strong></span></p> <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.&nbsp;</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> <p><strong>Financial Intermediaries</strong></p> <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>