Investors should carefully consider the objectives, risks, charges and expenses of the Fund before investing. This information and other information about the Fund can be found in the prospectus and summary prospectus. For a prospectus or summary prospectus please visit our website at https://usmutualfund.bailliegifford.com. Please carefully read the Fund’s prospectus and related documents before investing. Securities are offered through Baillie Gifford Funds Services LLC, an affiliate of Baillie Gifford Overseas Limited and a member of FINRA.
They are businesses built to last, often family-owned or controlled, with a strong sense of identity and a stewardship mindset that prioritises sustainable growth over short-term gains. The inherent alignment of interests between controlling owners and shareholders is, in our opinion, what makes these businesses excellent investment opportunities.
Timeless brands, lasting business models
The European luxury sector offers iconic examples. Companies such as Hermès, LVMH, and Ferrari have built powerful flywheels of brand prestige, customer loyalty and pricing power. Their staying power stems not just from heritage, but from relentless craftsmanship and a philosophy that values quality over quantity. Hermès, still controlled by the founding family after six generations, has turned patience into a competitive moat. Similarly, Ferrari’s brand strength, rooted in racing legacy and engineering excellence, has created demand that consistently outstrips supply, reinforcing its market position.
These businesses exemplify the Lindy effect: the longer something has lasted, the more likely it is to continue lasting. Investors often underestimate the compounding advantage of such endurance, which can quietly drive outperformance over time.
Reinvention without losing identity
True staying power also demands reinvention. Swedish industrial company Atlas Copco, guided by long-term shareholders such as the Wallenberg family, has transformed repeatedly over the past 150 years, from railways to compressors to semiconductor vacuum technology. Each shift has been anchored by a decentralised, resilient culture and a focus on long-term returns.
Likewise, family holding companies such as Exor (of the Agnelli family) and Novo Holdings (linked to Novo Nordisk) have evolved from legacy businesses into forward-looking capital allocators. Their ability to deploy capital across generations, rather than fiscal quarters, allows for strategic agility and resilience in a changing world.
Asia’s generational advantage
Across Asia, a similar pattern emerges. Companies such as Shimano in Japan and Samsung in South Korea are guided by values passed down through generations, resulting in disciplined execution and deep-rooted innovation. As many family-owned firms in China and south-east Asia undergo their first major generational transitions, they are blending tradition with technology, positioning themselves to lead in a rapidly digitising economy.
This cultural continuity is not only a stabilising force but also a source of innovation. These companies invest heavily in research and development, maintain prudent balance sheets, and often serve underserved or emerging markets with tailored, enduring solutions.
Why endurance matters today
In an era of elevated volatility, geopolitical uncertainty and macroeconomic headwinds, endurance itself is becoming a rare and valuable asset. Companies that focus on long-term reinvestment, cultural stewardship and operational excellence are better equipped to weather disruption, not just survive it, but grow through it.
Against an increasingly concentrated and short-term-focused market backdrop, enduring international businesses offer diversification and long-term growth potential. They remind us that not all compounding is flashy. Sometimes, it’s quiet, patient, and deeply transformational.
Risk factors
The Funds are distributed by Baillie Gifford Funds Services LLC. Baillie Gifford Funds Services LLC is registered as a broker-dealer with the SEC, a member of FINRA and is an affiliate of Baillie Gifford Overseas Limited. All information is sourced from Baillie Gifford & Co unless otherwise stated.
As with all mutual funds, the value of an investment in the Fund could decline, so you could lose money. International investing involves special risks, which include changes in currency rates, foreign taxation and differences in auditing standards and securities regulations, political uncertainty and greater volatility. These risks are even greater when investing in emerging markets. Security prices in emerging markets can be significantly more volatile than in the more developed nations of the world, reflecting the greater uncertainties of investing in less established markets and economies. Currency risk includes the risk that the foreign currencies in which a Fund’s investments are traded, in which a Fund receives income, or in which a Fund has taken a position, will decline in value relative to the U.S. dollar. Hedging against a decline in the value of currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. In addition, hedging a foreign currency can have a negative effect on performance if the U.S. dollar declines in value relative to that currency, or if the currency hedging is otherwise ineffective.
For more information about these and other risks of an investment in the Funds, see "Principal Investment Risks" and "Additional Investment Strategies" in the prospectus. There can be no assurance that the Funds will achieve their investment objectives.
This communication was produced and approved in August 2025 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.
This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned.
As at August 2025, Baillie Gifford held Atlas Copco, Exor N.V., Ferrari, Hermès International, LVMH, Novo Nordisk, Samsung Electronics and Shimano. A full list of holdings is available on request and is subject to change.
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