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<p><strong>Your capital is at risk. Past performance is not a guide to future returns.</strong></p>
<p> </p>
<p><strong>Paul Taylor</strong>: </p>
<p>When we look at the portfolio today, a key distinction is between stock market performance and business performance.</p>
<p>Over both the quarter and the past year, the portfolio has underperformed the benchmark. But the underlying businesses we own continue to do well.</p>
<p>In aggregate, they have continued to grow, gain share, and strengthen their competitive positions. Some are also now available at lower valuations than a year ago.</p>
<p>That combination matters a lot.</p>
<p>Real operating progress, at a lower price, is often what creates the opportunity for strong long-term returns.</p>
<p>MercadoLibre is a good example.</p>
<p>The market has been concerned that the company is investing too heavily across ecommerce and financial services. That has pressured margins, and the share price has suffered.</p>
<p>But the operating evidence tells a different story.</p>
<p>Revenue grew 49 percent year over year in last quarter. In Brazil, items sold rose 56 percent. Credit and advertising are also scaling quickly.</p>
<p>So the question is not simply, are margins lower today?</p>
<p>The better question is, are they building a much larger and stronger business for the future?</p>
<p>We think they are.</p>
<p>And this is where long-term perspective matters.</p>
<p>This chart is a useful reminder that we have seen this pattern before.</p>
<p>It shows MercadoLibre’s revenue and operating income over time. The highlighted period shows when the company was investing heavily, particularly in Brazilian logistics.</p>
<p>Margins fell. Operating income turned negative. From a short-term perspective, it looked like the business was going backwards.</p>
<p>But that investment improved delivery, increased customer trust and helped MercadoLibre build a stronger position in Brazil.</p>
<p>And just look what happened afterwards.</p>
<p>Revenue grew dramatically. Operating income recovered. The business became larger, stronger, and more valuable.</p>
<p>That is the lesson.</p>
<p>The market often sees investment as a cost. We ask whether it is actually the price of building a much larger and more valuable business.</p>
<p>Spotify is another example.</p>
<p>The market has become more sceptical about digital businesses because of AI. That concern is real. Some advantages may become easier to copy.</p>
<p>But Spotify is not just an app. It is a two-sided marketplace, with listeners on one side and creators and advertisers on the other.</p>
<p>And the core business is still compounding. Operating profit grew 40 percent year over year.</p>
<p>More importantly, AI may make Spotify more valuable, not less.</p>
<p>A general model can make a playlist. But it does not know what you listen to when you run, when you relax, or how your taste changes over time.</p>
<p>Spotify does. In an AI world, that behavioural data may become more valuable, not less.</p>
<p>There have also been areas of strength in the portfolio.</p>
<p>TSMC and ASML performed well. Both are central to AI infrastructure, and both benefit from rising demand for advanced chips.</p>
<p>We’ve been a bit more active than usual in the portfolio, during the quarter adding SK Hynix, Lonza, and CATL. They give us exposure to AI memory demand, biologic medicines manufacturing, and leading battery technology.</p>
<p>Different fields, but the same thread: exceptional businesses in large, structurally growing markets, run by adaptable leaders.</p>
<p>Funding for these was mainly from TSMC and ASML as they continued to do well.</p>
<p>The path will not be smooth.</p>
<p>But our principles remain the same.</p>
<p>Identify exceptional companies.</p>
<p>Own them patiently.</p>
<p>And give operating excellence the time it needs to compound.</p>
<p> </p>
<h3 class="TABLEHEADER1212pt">International Concentrated Growth</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: 74.6668px;">
<tbody>
<tr style="height: 18.6667px;">
<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: 18.6667px; width: 58.7043%;"> </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: 18.6667px; text-align: right; width: 8.33054%;"><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: 18.6667px; text-align: right; width: 8.20038%;"><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: 18.6667px; text-align: right; width: 8.20038%;"><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: 18.6667px; text-align: right; width: 8.20038%;"><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: 18.6667px; text-align: right; width: 8.20038%;"><strong>2026</strong></td>
</tr>
<tr style="height: 18.6667px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; width: 58.7043%;">International Concentrated Growth Composite (gross)</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.33054%;">-46.1</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">22.4</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">11.1</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">28.5</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">-5.1</td>
</tr>
<tr style="height: 18.6667px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; width: 58.7043%;">International Concentrated Growth Composite (net)</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.33054%;">-46.4</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">21.6</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">10.3</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">27.7</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">-5.7</td>
</tr>
<tr style="height: 18.6667px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; width: 58.7043%;">MSCI ACWI ex US Index</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.33054%;">-19.0</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">13.3</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">12.2</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">18.4</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px; text-align: right; width: 8.20038%;">28.3</td>
</tr>
</tbody>
</table>
<p> </p>
<p><strong>Annualised returns to 30 June 2026 (%)</strong></p>
<table border="1" style="border-collapse: collapse; width: 100.018%; border-width: 0px; height: 93.3618px;">
<tbody>
<tr style="height: 36.9981px;">
<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: 36.9981px; width: 61.297%;"> </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: 36.9981px; width: 13.1444%; 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: 36.9981px; width: 12.7539%; 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: 36.9981px; width: 12.7539%; text-align: right;"><strong>10 years</strong></td>
</tr>
<tr style="height: 18.7879px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 61.297%;">International Concentrated Growth Composite (gross)</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 13.1444%; text-align: right;">-5.1</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 12.7539%; text-align: right;">-2.2</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.7879px; width: 12.7539%; text-align: right;">14.4</td>
</tr>
<tr style="height: 18.7879px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 61.297%;">International Concentrated Growth Composite (net)</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 13.1444%; text-align: right;">-5.7</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 12.7539%; text-align: right;">-2.8</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 12.7539%; text-align: right;">13.6</td>
</tr>
<tr style="height: 18.7879px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 61.297%;">MSCI ACWI ex US Index</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 13.1444%; text-align: right;">28.3</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.7879px; width: 12.7539%; text-align: right;">9.3</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.7879px; width: 12.7539%; text-align: right;">10.5</td>
</tr>
</tbody>
</table>
<p><strong>Source:</strong> Revolution, MSCI. US dollars. Net returns have been calculated by reducing the gross return by the highest annual management fee for the composite. 1 year figures are not annualised.<br><br></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>
<p> </p>
<h3>Risk factors </h3>
<p>This communication was produced and approved in July 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 & Co and is current unless otherwise stated. </p>
<p>The images used in this communication are for illustrative purposes only.</p>
<p><strong>Important information<br></strong>Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford & 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 & Co. Baillie Gifford & 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>
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