Tencent: Stock Story

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<p class="MsoNormal"><strong>Investors should consider the investment objectives, risks, charges and expenses carefully before investing. This information and other information about the Funds can be found in the prospectus and summary prospectus. For a prospectus and summary prospectus, please visit our website at bailliegifford.com/usmutualfunds 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 Ltd and a member of FINRA.</strong></p> <p>&nbsp;</p> <h3>Tell us about the company</h3> <p><strong>Fernanda Lai:</strong> You might recall the days when instant communication with friends and family meant making a phone call, visiting in person, or using internet applications like AOL and MSN Messenger. Recognising the need for a service tailored to Chinese language and culture, Pony Ma created the desktop messaging platform, QQ.&nbsp;</p> <p>No one would have expected a free chatroom company to evolve into Tencent, one of the world's largest technology companies, and creator of the super app, WeChat, which has over 1.4 billion monthly users.&nbsp;</p> <h3>What makes this stock special?</h3> <p>Tencent’s diverse products serve as the digital glue for millions in China, connecting users across gaming, social media, payments, advertising and cloud computing. Even outside of China, its presence is felt with popular games like Clash of Clans and League of Legends, crowd favourites that have contributed to Tencent's success in becoming the world’s largest gaming company.&nbsp;</p> <p>The connected ecosystem of the company’s offerings means that both consumers and businesses have little reason to leave. Users can message friends, hail taxis and pay utility bills all within WeChat. This closed network gives Tencent an incredible data and distribution advantage. It has continued to deepen this by adding new products and services that improve the core user experience. For instance, Tencent Music, which is a music streaming platform that was incubated within the company, has become China’s dominant music streaming platform.</p> <p>Another example would be its strategic investments in over a thousand companies worldwide, including household names like Tesla and Spotify. These investments help it gain valuable insight into how the world is changing, which it can then bring back to its own business.</p> <h3>What could the future hold?</h3> <p>What Tencent has built makes a powerful platform for AI experimentation. AI is already enhancing advertising and gaming today. Click-through rates on a feed ad have already tripled, benefiting both consumers and businesses. Gaming is being enhanced to be safer and smarter, with tools preventing cheating and fraud, as well as bots that coach players.&nbsp;</p> <p>The engine of growth for Tencent has always been powered by bringing consumers and businesses closer together. And it has just scratched the surface on how integrating AI can kindle further growth.</p> <p class="MsoNormal">&nbsp;</p> <p class="MsoNormal">&nbsp;</p> <h3 class="MsoNormal">Risk factors</h3> <p class="MsoNormal">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 &amp; Co unless otherwise stated.</p> <p class="MsoNormal">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.</p> <p class="MsoNormal">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.</p> <p class="MsoNormal">This communication was produced and approved in February 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.</p> <p class="MsoNormal">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.</p> <p class="MsoNormal">As at February 2026, Baillie Gifford held Tencent. A full list of holdings is available on request and is subject to change.</p> <p class="MsoNormal">&nbsp;</p>