Enhanced Yield

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<p class="MsoNormal"><strong>As with any investment, your capital may be at risk.</strong></p> <p><strong>Sally Greig:</strong> Baillie Gifford Enhanced Yield was created to meet a clear client need. Investors want a step out of cash, not a leap into the unknown. We believe short-duration public credit and government bonds are the right place to do that, offering liquidity and resilience alongside the potential for a meaningful yield pickup. But yield alone is not enough. What matters is the quality of that yield.</p> <p>Drawing on our long-track record in active management, we aim to generate income and manage risk with equal discipline. Through asset allocation and rigorous security selection, we target the most attractive risk-adjusted opportunities using our proven investment process. The result is a portfolio designed to be genuinely useful. A higher yielding investment product, a source of balance sheet diversification and a resilient collateral tool. That is the foundation of Baillie Gifford Enhanced Yield. Liquid, actively managed and built to be used.</p> <p>Our Enhanced Yield Strategy invests in a globally diversified portfolio of government and corporate bonds, traded in public regulated markets. We believe these assets provide the right foundation for investors because they combine three qualities that matter: liquidity, transparency and resilience. Those characteristics are strengthened by active management. In fixed income, index strategies can lead investors to lend most to the biggest borrowers, even when fundamentals are deteriorating. We believe it is better to be selective, avoiding weaker credits and focusing on the most attractive risk-adjusted opportunities.</p> <p>Short duration adds a further benefit. Because these bonds mature sooner, they are typically less sensitive to interest rate moves than longer-dated bonds, helping to reduce volatility. For a portfolio intended to serve as a credible collateral tool or as a diversifying step out of cash, that matters. Short-duration public fixed income provides a robust and practical foundation. The global bond market is vast, diverse and far from perfectly efficient, creating opportunities to add value by identifying mispriced risk and improving risk-adjusted returns.</p> <p>Our role, as managers of enhanced yield, is to find government and corporate bonds where the yield more than compensates for the risk. That requires rigorous issuer analysis, focused on three things: underlying strength, financial structure and resilience across different environments. But selection alone is not enough. Portfolio construction and risk management are central to how we add value. The shape of the portfolio matters as much as the assets within it.</p> <p>Our starting point is a balanced mix of sovereign and corporate bonds, with each playing a distinct role. Some assets provide liquidity and stability. Others contribute attractive yield. Together, they create a diversified, balanced portfolio designed to remain resilient under pressure. This reflects a process we have applied for decades in global fixed income, focused on one objective: delivering attractive, dependable yield earned through discipline.</p> <h3>Risk Factors</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 June 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&nbsp;</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.&nbsp;</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.&nbsp;</p> <p>The images used in this communication are for illustrative purposes only.</p>