Statement of Additional Information
April 28, 2023, as revised October 1, 2023
 

 

Baillie Gifford Funds

This Statement of Additional Information ("SAI") relates to the following funds and share classes of Baillie Gifford Funds (the "Trust"):

   

Class 2

 

Class 3

 

Class 4

 

Class 5

 

Class K

 

Institutional
Class

 

Baillie Gifford China A Shares Growth Fund

                 

BCAKX

 

BCANX

 

Baillie Gifford China Equities Fund

                 

BGCDX

 

BGCBX

 

Baillie Gifford Developed EAFE All Cap Fund

 

BGPTX

 

BGPFX

 

BGPWX

 

BGPVX

 

BGPKX

 

BSGPX

 

Baillie Gifford EAFE Plus All Cap Fund

 

BGCWX

 

BGCJX

 

BGCLX

 

BGCVX

 

BKGCX

 

BGCSX

 

Baillie Gifford Emerging Markets Equities Fund

 

BGEHX

 

BGELX

 

BGEPX

 

BGEDX

 

BGKEX

 

BGEGX

 

Baillie Gifford Emerging Markets ex China Fund

                 

BGEZX

 

BGEWX

 

Baillie Gifford Global Alpha Equities Fund

 

BGATX

 

BGAEX

 

BGALX

 

BGAVX

 

BGAKX

 

BGASX

 

Baillie Gifford Health Innovation Equities Fund

                 

BGHDX

 

BGHBX

 

Baillie Gifford International Alpha Fund

 

BGITX

 

BGIFX

 

BGIUX

 

BGIVX

 

BGIKX

 

BINSX

 

Baillie Gifford International Concentrated
Growth Equities Fund

                 

BTLKX

 

BTLSX

 

Baillie Gifford International Growth Fund

 

BGETX

 

BGEUX

 

BGEFX

 

BGEVX

 

BGEKX

 

BGESX

 

Baillie Gifford International Smaller
Companies Fund

                 

BICKX

 

BICIX

 

Baillie Gifford Long Term Global Growth Fund

 

BGLTX

 

BGLOX

 

BGLFX

 

BGADX

 

BGLKX

 

BSGLX

 

Baillie Gifford U.S. Discovery Fund

                 

BGUKX

 

BGUIX

 

Baillie Gifford U.S. Equity Growth Fund

                 

BGGKX

 

BGGSX

 

This SAI is not a prospectus. This SAI provides additional information in relation to the prospectuses for the funds listed above (each a "Fund" and together the "Funds") dated April 28, 2023, each as revised or supplemented from time to time (together, the "Prospectus"), and should be read in conjunction therewith.

This SAI was fully updated and restated as of April 28, 2023 in connection with the annual update to the Trust's registration statement and has subsequently been revised in part to reflect select changes affecting the Trust as of the most recent revision date stated above. Most financial and quantitative data, as well as time-bound or forward-looking qualitative disclosure, have not been updated or refreshed beyond the original April 28, 2023 date, and they consequently speak as of that date.

The most recent annual reports of Baillie Gifford China A Shares Growth Fund, Baillie Gifford China Equities Fund, Baillie Gifford Developed EAFE All Cap Fund, Baillie Gifford EAFE Plus All Cap Fund, Baillie Gifford Emerging Markets Equities Fund, Baillie Gifford Emerging Markets ex China Fund, Baillie Gifford Global Alpha Equities Fund, Baillie Gifford Health Innovation Fund, Baillie Gifford International Alpha Fund, Baillie Gifford International Concentrated Growth Equities Fund, Baillie Gifford International Growth Fund, Baillie Gifford International Smaller Companies Fund, Baillie Gifford Long Term Global Growth Fund, Baillie Gifford U.S. Discovery Fund and Baillie Gifford U.S. Equity Growth Fund are incorporated by reference into this SAI.

The Prospectus and the most recent annual and semi-annual report to shareholders of each Fund may be obtained, free of charge, by contacting the Trust using the details below.

Online

 

http://USmutualfund.bailliegifford.com

 

Email

 

[email protected]

 

Mail

  c/o Baillie Gifford Overseas Ltd., Calton Square, 1 Greenside Row,
Edinburgh, United Kingdom EH1 3AN
 

Toll-Free Telephone

 

1-844-394-6127

 

 

Table of Contents

Background on the Trust and the Funds

   

2

   

Fund Investments

   

3

   

Non-Fundamental Investment Policies

   

3

   

Fundamental Investment Policies

   

4

   

Temporary Defensive Positions

   

4

   

Borrowings

   

4

   

Other Investment Companies

   

4

   

Diversification

   

5

   

Risks

   

5

   

Disclosure of Fund Investments

   

14

   

Investment Glossary

   

15

   

Purchase, Redemption, and Pricing of Shares

   

18

   

How to Buy & Redeem Shares

   

18

   

Determination of Net Asset Value

   

18

   

Election under Rule 18f-1

   

18

   

Board Members and Trust Officers

   

19

   

Trustee Responsibilities and Powers

   

19

   

Trustee Appointments

   

19

   

Trustee Nominations by Shareholders

   

19

   

Trustee Meetings

   

22

   

Committees

   

23

   

Trustee Compensation

   

23

   

Trust Officers

   

24

   

Trust Officer Compensation

   

24

   

Board Member and Trust Officer Liability

   

24

   

Investment in the Funds by Trust, Manager and Distributor Personnel

   

24

   

Manager

   

25

   

Oversight by the Board

   

25

   

Management Services

   

25

   

Shareholder Services

   

27

   

Administration and Supervisory Services

   

27

   

Investment Decisions by Portfolio Managers

   

28

   

Proxy Voting

   

34

   

Investment Process

   

34

   

Payments to Financial Intermediaries

   

36

   

Other Services

   

37

   

Compensation

   

37

   

Other Key Service Providers

   

39

   

Administrator – BNYM

   

39

   

Custodian – BNYM

   

39

   

Transfer Agent – BNY Mellon Asset Servicing

   

39

   

Independent Registered Public Accounting Firm – Cohen & Company, Ltd.

   

39

   

Underwriter – BGFS

   

39

   

Trust Legal Counsel – Ropes & Gray LLP

   

39

   

Independent Trustee Legal Counsel – Vedder Price P.C.

   

39

   

Shareholders

   

40

   

Principal Holders of Securities

   

40

   

Control Persons

   

43

   

Management Ownership

   

44

   

Shareholder Rights

   

44

   

Distributions

   

45

   

Tax

   

46

   

Financial Statements

   

53

   


Baillie Gifford Funds – Statement of Additional Information

Background on the Trust and the Funds

The Trust

Baillie Gifford Funds (the "Trust") is registered with the Securities and Exchange Commission ("SEC") as an open-end management investment company. The Trust was organized as a Massachusetts business trust on June 21, 2000.

Funds

The Trust consists of multiple series, a subset of which, as set out below, are offered in the Prospectus and this SAI. Each series that is offered under the Prospectus and this SAI is referred to in this SAI as a "Fund" and together the "Funds."

 

Series

 

Share Classes

 

Diversified

 

Baillie Gifford China A Shares Growth Fund*

 

Institutional, K

 

No

 

Baillie Gifford China Equities Fund

 

Institutional, K

 

No

 

Baillie Gifford Developed EAFE All Cap Fund

  2, 3, 4, 5,
Institutional, K
 

Yes

 

Baillie Gifford EAFE Plus All Cap Fund

  2, 3, 4, 5,
Institutional, K
 

Yes

 

Baillie Gifford Emerging Markets Equities Fund

  2, 3, 4, 5,
Institutional, K
 

Yes

 

Baillie Gifford Emerging Markets ex China Fund

 

Institutional. K

 

No

 

Baillie Gifford Global Alpha Equities Fund

  2, 3, 4, 5,
Institutional, K
 

Yes

 

Baillie Gifford Health Innovation Equities Fund

 

Institutional, K

 

No

 

Baillie Gifford International Alpha Fund

  2, 3, 4, 5,
Institutional, K
 

Yes

 

Baillie Gifford International Concentrated Growth Equities Fund

 

Institutional, K

 

No

 

Baillie Gifford International Growth Fund

  2, 3, 4, 5,
Institutional, K
 

Yes

 

Baillie Gifford International Smaller Companies Fund

 

Institutional, K

 

Yes

 

Baillie Gifford Long Term Global Growth Fund

  2, 3, 4, 5,
Institutional, K
 

No

 

Baillie Gifford U.S. Discovery Fund

 

Institutional, K

 

No

 

Baillie Gifford U.S. Equity Growth Fund

 

Institutional, K

 

No

 

*  Prior to April 30, 2021, Baillie Gifford China A Shares Growth Fund was known as Baillie Gifford China A Shares Fund.

The differences between the classes of shares are addressed in the Prospectus under "Shares—Restrictions on Buying Shares."

On November 25, 2019, the names of certain Funds were changed as follows:

Current Fund Name

 

Previous Fund Name

 

Baillie Gifford Developed EAFE All Cap Fund

 

The EAFE Pure Fund

 

Baillie Gifford EAFE Plus All Cap Fund

 

The EAFE Choice Fund

 

Baillie Gifford Emerging Markets Equities Fund

 

The Emerging Markets Fund

 

Baillie Gifford Global Alpha Equities Fund

 

The Global Alpha Equity Fund

 

Baillie Gifford International Alpha Fund

 

The International Equity Fund

 

Baillie Gifford International Concentrated Growth Equities Fund

 

The International Concentrated Growth Fund

 

Baillie Gifford International Growth Fund

 

The EAFE Fund

 

Baillie Gifford International Smaller Companies Fund

 

The International Smaller Companies Fund

 

Baillie Gifford Long Term Global Growth Fund

 

The Long Term Global Growth Equity Fund

 

Baillie Gifford U.S. Equity Growth Fund

 

The U.S. Equity Growth Fund

 


2


Baillie Gifford Funds – Statement of Additional Information

Fund Investments

This section sets out investment policies for each Fund, which apply in addition to the investment strategies summarized in the Prospectus under "Principal Investment Strategies" and "Selected Investment Techniques and Topics." The investment policies of each Fund set forth in the Prospectus and in this SAI may be changed by the Trust's Board of Trustees (the "Board") without shareholder approval except that any policy explicitly identified as "fundamental" may not be changed without the approval of the holders of a majority of the outstanding shares of the relevant Fund (which means the lesser of (i) 67% of the shares of that Fund represented at a meeting at which 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding shares).

Except as otherwise stated or as required under applicable law, all percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

Non-Fundamental Investment Policies

Each Fund's investment objective and policies set forth in the prospectus are non-fundamental policies of such Fund. In addition, each Fund will not invest more than 15% of the value of net assets of the Fund in illiquid investments.

The following non-fundamental policies set forth in the Prospectus are subject to change only upon sixty days' prior notice to shareholders.

—  Baillie Gifford China A Shares Growth Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in China A shares.

—  Baillie Gifford China Equities Fund
Under normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other equity securities of companies located in China, regardless of where their securities are principally listed for trading.

—  Baillie Gifford Developed EAFE All Cap Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other equity securities of companies whose principal activities are in developed markets in Europe, Australasia, and/or the Far East.

—  Baillie Gifford EAFE Plus All Cap Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other equity securities of companies whose principal activities are in Europe, Australasia, and/or the Far East.

—  Baillie Gifford Emerging Markets Equities Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of companies located in countries contained in the MSCI Emerging Markets Index.

—  Baillie Gifford Emerging Markets ex China Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in companies located in countries represented in the MSCI Emerging Markets ex China Index.

—  Baillie Gifford Global Alpha Equities Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities.

—  Baillie Gifford Health Innovation Equities Fund
Under normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of companies engaged in or supporting innovation in one or more healthcare or healthcare-related industries.

—  Baillie Gifford International Alpha Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other equity securities.

—  Baillie Gifford International Concentrated Growth Equities Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities.

—  Baillie Gifford International Smaller Companies Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities of smaller companies.

—  Baillie Gifford U.S. Discovery Fund*
Under normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in securities of issuers located in the U.S.

*  The Fund's voluntarily adopted investment policy to invest, under normal circumstances, at least 80% of its net assets in securities of small- and mid-capitalization companies, as described in the Prospectus, was not adopted pursuant to Rule 35d-1 under the Investment Company Act of 1940, as amended, and can be changed without shareholder notice.

—  Baillie Gifford U.S. Equity Growth Fund
Under normal circumstances, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks and other equity securities of companies whose principal activities are in the U.S.


3


Baillie Gifford Funds – Statement of Additional Information

Fundamental Investment Policies

In addition to each Fund's diversification status as stated in the above "Background on the Trust and the Funds—Funds" section, the following are fundamental policies of the Funds:

Each Fund will not:

1.  Act as underwriter of securities issued by other persons, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws.

2.  Borrow money, except to the extent permitted by applicable law, regulation or order.

3.  Purchase or sell real estate or interests in real estate, except that the Fund may purchase and sell securities that are secured by real estate or interests in real estate and may purchase securities issued by companies that invest or deal in real estate.

4.  Invest in commodities, except that each Fund may invest in financial futures contracts and options thereon, and options on currencies.

5.  Make loans to others, except through the purchase of qualified debt obligations, the entry into repurchase agreements and/or the making of loans of portfolio securities consistent with the Fund's investment objectives and policies. For purposes of this policy, the short term deposit of cash or other liquid assets of the Fund in one or more interest-bearing accounts shall not be deemed to be a loan to others.

6.  Issue any senior securities except to the extent permitted by applicable law, regulation or order (for purposes of this restriction, collateral arrangements with respect to any type of swap, option, forward contract or future contract and collateral arrangements with respect to initial and variation margin are not deemed to involve the issuance of a senior security).

In addition, each Fund other than Baillie Gifford Health Innovation Equities Fund will not purchase any securities which would cause more than 25% of the value of the Fund's total assets at the time of purchase to be invested in the securities of issuers conducting their principal business activities in the same industry; provided that there shall be no limit on the purchase of U.S. government securities, including securities issued by any agency or instrumentality of the U.S. government, and related repurchase agreements.

Baillie Gifford Health Innovation Equities Fund will concentrate its investments (defined by regulations as investing at least 25% of its total assets at the time of purchase) in the securities of issuers whose principal business activities are in healthcare and healthcare-related industries.

In determining whether a transaction is permitted by applicable law, regulation, or order, each Fund currently construes fundamental policies (2) and (6) above not to prohibit any transaction that is permitted under Section 18 of the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules thereunder, including Rule 18f-4, as interpreted or modified, or as may otherwise be permitted by regulators having

jurisdiction from time to time. Under the 1940 Act, a "senior security" does not include any promissory note or evidence of indebtedness when such loan is for temporary purposes only and in an amount not exceeding 5% of the value of the total assets of the issuer at the time the loan is made. A loan is presumed to be for temporary purposes if it is repaid within sixty days and is not extended or renewed. Provisions of the 1940 Act permit each Fund to borrow from a bank, provided that each Fund maintains continuous asset coverage (that is, total assets including borrowings, less liabilities exclusive of borrowings) of 300% of the amount borrowed, with exceptions for borrowings not in excess of 5% of the Fund's total assets made for temporary administrative purposes.

For purposes of fundamental policy (4) above, all swap agreements and other derivative instruments that were not classified as commodity interests or commodity contracts prior to July 21, 2010 are not deemed to be commodities or commodity contracts.

Temporary Defensive Positions

Each Fund may invest a portion of its assets in cash or cash equivalents, including money market funds or short-term commercial paper, to facilitate daily portfolio operations, and to take temporary defensive positions—for instance, by allocating substantial assets to cash, commercial paper, or other less volatile instruments—in response to adverse or unusual market, economic, political, or other conditions. In taking temporary defensive positions, each Fund may succeed in avoiding losses but may otherwise fail to achieve its investment objective.

Borrowings

The Trust, on behalf of certain Funds advised by Baillie Gifford Overseas Limited (the "Manager" and each such fund, a "Participating Fund" and together, the "Participating Funds"), has entered into a revolving credit facility agreement (the "Credit Agreement") with The Bank of New York Mellon ("BNYM") whereby the Participating Funds may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes.

The Credit Agreement permits the Participating Funds to borrow up to an aggregate commitment amount of $75 million at any time outstanding, subject to asset coverage and other limitations as specified in the Credit Agreement.

Borrowing results in interest expense and other fees and expenses that may impact a Fund's expenses, including any net expense ratios. The costs of borrowing may reduce the total returns for a Fund. The Credit Agreement also imposes an ongoing commitment fee on undrawn amounts under the credit facility, which is paid by the Participating Funds and is allocated to each Participating Fund and each share class within each Participating Fund, pro rata, based on such Participating Fund's average net asset value.

Other Investment Companies

A Fund may invest in securities of other investment companies or unit investment trust investment companies, including exchange-traded funds, to the extent that such investments are consistent with the Fund's investment objective and policies and permissible under the 1940 Act and the rules thereunder. To the extent a


4


Baillie Gifford Funds – Statement of Additional Information

Fund relies on Section 12(d)(1)(G) of the 1940 Act to invest without limit in shares of another series of the Trust (each, an "Underlying Fund"), such Underlying Fund may not acquire securities of other registered open-end investment companies or registered unit investment trusts in reliance on Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act. The SEC has adopted Rule 12d1-4 under the 1940 Act. Subject to certain conditions Rule 12d1-4 provides an exemption to permit acquiring funds to invest in the securities of other registered investment companies in excess of the limits of Section 12(d)(1).

Diversification

Each Fund that is a diversified fund generally will not, with respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies. Additionally, each Fund that is a diversified fund generally will not, with respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer.

Risks

The principal risks of investing in each of the Funds are summarized in the Prospectus under the Fund Summaries and are discussed in more detail under "Principal Investment Risks."

The discussion below is meant to supplement these sections of the Prospectus by addressing certain non-principal risks and providing additional detail regarding certain of the principal risks.

Accelerated Transactions

For a Fund to take advantage of certain available investment opportunities, the Manager may need to make investment decisions on an expedited basis. In such cases, the information available to the Manager at the time of an investment decision may be limited. The Manager may not, therefore, have access to the detailed information necessary for a full analysis and evaluation of the investment opportunity.

Banking Sector Risk

In March 2023, the shut-down of certain financial institutions raised economic concerns over disruption in the U.S. banking system. There can be no certainty that the actions taken by the U.S. government to strengthen public confidence in the U.S. banking system will be effective in mitigating the effects of financial institution failures on the economy and restoring public confidence in the U.S. banking system. Other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, may reduce liquidity in the market generally or have other adverse effects on the economy, a Fund or issuers in which the Funds invest. In addition, issuers in which the Funds invest and the Funds may not be able to identify all potential solvency or stress concerns with respect to a financial institution or to transfer assets from one bank or financial institution to another in a timely manner in the event such bank or financial institution comes under stress or fails.

Convertible Securities

The price of a convertible security will normally vary in some proportion to changes in the price of the underlying equity security because convertible securities may be converted at either a stated price or a stated rate into underlying shares of common stock. However, the value of a convertible security may not increase or decrease as rapidly as the underlying common stock. A convertible security may be called for redemption or conversion by the issuer after a particular date and under certain circumstances (including a specified price) established upon issue. If a convertible security held by a Fund is called for redemption or conversion, the Fund could be required to tender it for redemption, convert it into the underlying common stock or sell it to a third party. A convertible security will normally also provide income and is subject to interest rate risk. Convertible securities may be lower-rated or high-yield securities subject to greater levels of credit risk, and may also be less liquid than non-convertible debt securities. While convertible securities generally offer lower interest or dividend yields than non-convertible fixed income securities of similar quality, their value tends to increase as the market value of the underlying stock increases and to decrease when the value of the underlying stock decreases. However, a convertible security's market value tends to reflect the market price of the common stock of the issuing company when that stock price approaches or is greater than the convertible security's "conversion price." The conversion price is defined as the predetermined price at which the convertible security could be exchanged for the associated stock. As the market price of the underlying common stock declines, the price of the convertible security tends to be influenced more by the yield of the convertible security. Thus, it may not decline in price to the same extent as the underlying common stock. Depending upon the relationship of the conversion price to the market value of the underlying security, a convertible security may trade more like an equity security than a debt instrument. Also, a Fund may be forced to convert a security before it would otherwise choose, which may decrease such Fund's return.

Derivatives

A Fund's use of derivative instruments involves risks different from, or greater than, the risks associated with investing directly in securities and other more traditional investments, and the use of certain derivatives may subject a Fund to the potential for unlimited loss.

Management Risk

Derivative products are highly specialized instruments that require investment techniques and risk analyses different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but also of the derivative itself, without the benefit of observing the performance of the derivative under all possible market conditions.

Credit and Counterparty Risk

The use of a derivative instrument involves the risk that a loss may be sustained as a result of the failure of another party to the contract (usually referred to as a "counterparty") to make required payments or otherwise comply with the contract's terms. To the extent a Fund has significant exposure to a single or small group of counterparties, this risk will be particularly pronounced.


5


Baillie Gifford Funds – Statement of Additional Information

Liquidity Risk

Liquidity risk exists when a particular derivative instrument is difficult to purchase or sell. If a derivative transaction is particularly large or if the relevant market is illiquid (as is the case with many privately negotiated derivatives), it may not be possible to initiate a transaction or liquidate a position at an advantageous time or price.

Leverage Risk

Because many derivatives have a leverage component, adverse changes in the value or level of the underlying asset, reference rate or index can result in a loss substantially greater than the amount invested in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When a Fund uses derivatives for leverage, investments in that Fund will tend to be more volatile, resulting in larger gains or losses in response to market changes. Other recent U.S. and non-U.S. legislative and regulatory reforms, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the 1940 Act restrictions with respect to "senior securities," have resulted in, and may in the future result in, new regulation of derivative instruments and the Funds' use of such instruments. New regulations could, among other things, restrict a Fund's ability to engage in derivative transactions (for example, by making certain types of derivative instruments or transactions no longer available to a Fund), establish new margin requirements and/or increase the costs of derivatives transactions, and the Fund may as a result be unable to execute its investment strategies in a manner its Manager might otherwise choose. As described below under "Risks Associated with Derivatives Regulation," the SEC recently adopted new Rule 18f-4 under the 1940 Act which applies to certain Funds' use of derivative investments and certain financing transactions (e.g., reverse repurchase agreements). Among other things, Rule 18f-4 requires funds that invest in derivative instruments beyond a specified limited amount to apply a value-at-risk based limit to their use of certain derivative instruments and financing transactions and to adopt and implement a derivatives risk management program. Funds that use derivative instruments (beyond certain currency and interest rate hedging transactions) in a limited amount are not subject to the full requirements of Rule 18f-4. In connection with the adoption of Rule 18f-4, funds are no longer required to comply with the asset segregation framework arising from prior SEC guidance for covering certain derivative instruments and related transactions. Additionally, compliance with the new rule by the Funds could, among other things, make derivatives more costly, limit their availability or utility, or otherwise adversely affect their performance.

Lack of Availability

Because the markets for certain derivative instruments (including markets located in non-U.S. countries) are relatively new and still developing, suitable derivatives transactions may not be available in all circumstances for risk management or other purposes. Upon the expiration of a particular contract, a portfolio manager of a Fund may wish to retain the Fund's position in the derivative instrument by entering into a similar contract, but may be unable to do so if the counterparty to the original contract is unwilling to enter into the new contract and no other suitable counterparty can be found. There is no assurance that a Fund will engage in

derivatives transactions at any time or from time to time. A Fund's ability to use derivatives may also be limited by certain regulatory and tax considerations.

Market and Other Risks

Like most other investments, derivative instruments are subject to the risk that the market value of the instrument will change in a way detrimental to a Fund's interest. If the Manager incorrectly forecasts the values of securities, currencies or interest rates or other economic factors in using derivatives for a Fund, the Fund might have been in a better position if it had not entered into the transaction at all. While some strategies involving derivative instruments can reduce the risk of loss, they can also reduce the opportunity for gain or result in losses by offsetting favorable price movements in other Fund investments. A Fund may also have to buy or sell a security at a disadvantageous time or price because such Fund is legally required to maintain offsetting positions or asset coverage in connection with certain derivatives transactions.

Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives. Many derivatives, in particular privately negotiated derivatives, are complex and often valued subjectively. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to a Fund. Also, the value of derivatives may not correlate perfectly, or at all, with the value of the assets, reference rates or indexes they are designed to closely track. There are significant differences between the securities and derivatives markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve the intended result. In addition, a Fund's use of derivatives may affect the amount, timing or character of distributions payable to, and thus taxes payable by, shareholders. Derivative instruments are also subject to the risk of ambiguous documentation. A decision as to whether, when and how to use derivatives involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. In addition, derivatives strategies that are successful under certain market conditions may be less successful or unsuccessful under other market conditions.

Risks Associated with Derivatives Regulation

The U.S. government has enacted and is continuing to implement legislation that provides for the regulation of the derivatives market, including clearing, margin, reporting, and registration requirements. The European Union and some other countries have also adopted and are continuing to implement similar requirements, which will affect a Fund when it enters into a derivatives transaction with a counterparty organized in that country or otherwise subject to that country's derivatives regulations. Such rules and other new rules and regulations could, among other things, restrict a Fund's ability to engage in, or increase the cost to the Fund of, derivatives transactions, for example, by making some types of derivatives no longer available to the Fund, increasing margin or capital requirements, or otherwise limiting liquidity or increasing transaction costs.

While the rules and regulations and central clearing of some derivatives transactions are designed to reduce systemic risk (i.e., the risk that the interdependence of large derivatives dealers could cause them to suffer liquidity, solvency or other


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Baillie Gifford Funds – Statement of Additional Information

challenges simultaneously), there is no assurance that they will achieve that result, and, as noted above, central clearing and related requirements expose the Funds to new kinds of costs and risks.

For example, in the event of a counterparty's (or its affiliate's) insolvency, a Fund's ability to exercise remedies, such as the termination of transactions, netting of obligations and realization on collateral, could be stayed or eliminated under the special resolution regimes adopted in the United States, the European Union and various other jurisdictions. Such regimes provide government authorities with broad authority to intervene when a financial institution is experiencing financial difficulty. In particular, with respect to counterparties who are subject to such proceedings in the European Union, the liabilities of such counterparties to the Funds could be reduced, eliminated, or converted to equity in such counterparties (sometimes referred to as a "bail in").

The SEC recently finalized new Rule 18f-4 under the 1940 Act providing for the regulation of registered investment companies' use of derivatives and certain related instruments. The new rule, among other things, limits derivatives exposure through one of two value-at-risk tests and eliminates the asset segregation framework for covering derivatives and certain financial instruments arising from the SEC's Release 10666 and ensuing staff guidance. The rule also requires certain funds to adopt and implement a derivatives risk management program (including the appointment of a derivatives risk manager and the implementation of certain testing requirements) and subjects funds to certain reporting requirements in respect of derivatives. Limited derivatives users (as determined by Rule 18f-4) are not, however, subject to the full requirements under the rule. As of the date of this SAI, each Fund qualifies as a limited derivatives user as described under Rule 18f-4 and related SEC guidance.

Additionally, United States regulators, the European Union and certain other jurisdictions have adopted minimum margin and capital requirements for uncleared derivatives transactions. It is expected that these regulations will have a material impact on the Funds' use of uncleared derivatives. These rules impose minimum margin requirements on derivatives transactions between a Fund and its counterparties and may increase the amount of margin a Fund is required to provide. They impose regulatory requirements on the timing of transferring margin and the types of collateral that parties are permitted to exchange.

These and other regulations are evolving and subject to change, so their potential impact on the Funds and the financial system may vary over time.

Emerging Markets Risk

Investments in emerging market countries pose additional risks when compared to investments in more developed markets. Those risks include:

Less Developed Economies Risk

The securities markets of emerging market countries are generally smaller, less developed, less liquid, and more volatile than the securities markets of the U.S. and other developed foreign countries, and disclosure and regulatory standards in many respects are less stringent.

The economies of individual countries may differ favorably or unfavorably and significantly from the U.S. economy in such respects as growth of gross domestic product ("GDP") or gross national product, rate of inflation, currency depreciation, capital reinvestment, resource self-sufficiency, structural unemployment and balance of payments position.

The domestic economies of emerging market countries are generally not as diversified as those of the U.S. and certain Western European countries. A significant portion of many of such countries' national GDPs are represented by one commodity, such as oil, or groups of commodities. World fluctuations in the prices of certain commodities, such as the price of oil, may significantly affect the economy involved.

Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had and may continue to have negative effects on such countries' economies and securities markets.

Emerging market economies may also be dependent on international aid or development assistance, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates.

Due to the differences in the nature and quality of financial information of issuers of emerging market securities, including auditing and financial reporting standards, financial information and disclosures about such issuers may be unavailable or, if made available, may be considerably less reliable than publicly available information about other foreign securities. The Public Company Accounting Oversight Board, which regulates auditors of U.S. public companies, is unable to inspect audit work papers in certain foreign countries. Investors in foreign countries often have limited rights and few practical remedies to pursue shareholder claims, including class actions or fraud claims, and the ability of the SEC, the U.S. Department of Justice and other authorities to bring and enforce actions against foreign issuers or foreign persons is limited. As such, there is likely less recourse in the event of investor harm, and a Fund may not be able to protect its interests with respect to investments in emerging market countries.

Governmental & Political Risk

In addition, the securities markets of emerging market countries may be subject to a lower level of monitoring and regulation.

Government enforcement of existing securities regulations may be limited, and any such enforcements are typically arbitrary and the results may be difficult to predict. In addition, reporting requirements of emerging market countries with respect to the ownership of securities are more likely to be subject to interpretation or changes without prior notice to investors than more developed countries.

In many cases, governments of emerging market countries continue to exercise significant control over their economies, and government actions relative to the economy, as well as economic developments generally, may affect the capacity of creditors in those countries to make payments on their debt obligations, regardless of their financial condition. Local securities markets may trade a small number of securities and may be unable to


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Baillie Gifford Funds – Statement of Additional Information

respond effectively to increases in trading volume, potentially making prompt liquidation of substantial holdings difficult or impossible at times. Consequently, securities of issuers located in countries with emerging markets may have limited marketability and may be subject to more abrupt or erratic price movements. In addition, investor sentiment toward companies in otherwise unrelated markets may be influenced by adverse events in other foreign markets. Also, such local markets typically offer less regulatory protections for investors.

Furthermore, U.S. government actions and policies, such as those preventing certain investments, requiring disinvestment of certain holdings, or restricting economic transactions, may adversely impact the economic conditions in emerging market countries. Political change or instability, including the risks of war or terrorism, may also adversely affect the economies and securities markets of such countries. Expropriation, nationalization or other confiscation due to political change could result in a Fund's loss of its entire investment in the country involved. The possibility or reality of nationalization, expropriation or confiscatory taxation, currency blockage, political changes, government regulation, widespread corruption, political or social instability or diplomatic developments could affect adversely the economies of countries and the value of the Funds' investments in those countries.

Liquidity Risk

Lack of liquidity and efficiency and/or government-imposed quotas in certain of the stock markets or foreign exchange markets in certain emerging market countries may mean that from time to time the Manager may experience more difficulty in purchasing or selling holdings of securities than it would in a more developed market. Restrictions on day trading, manual trading, block trading and/or off-exchange trading may mean that the Funds' investment options will be limited.

The financial markets in emerging market countries are also undergoing rapid growth and changes. This may lead to increased trading and pricing volatility, suspension risk and difficulties in settlement of securities.

Custody Risk

The custodial systems in countries with emerging markets may also not be fully developed.

There may be limited regulatory oversight of certain foreign sub-custodians that hold foreign securities subject to the supervision of the Funds' primary US-based custodian, BNYM. The Funds may be limited in their ability to recover assets if a foreign sub-custodian becomes bankrupt or otherwise unable or unwilling to return assets of the Funds, which may expose the Funds to risk, especially in circumstances where the Funds' primary custodian may not be contractually obligated to make the Funds whole for the particular loss.

Investments in emerging markets may also carry risks associated with failed or delayed settlement of market transactions and with the registration and custody of securities. Prevailing custody and trade settlement practices (e.g., the requirement to pay for securities prior to receipt) may expose a Fund to credit and other risks. Similarly, the reliability of trading and settlement systems in

some emerging markets may not be equal to that available in more developed markets which may result in problems in realizing investments.

Currency Risk

Emerging market countries periodically experience increases in market volatility and declines in foreign currency exchange rates. Currency fluctuations affect the value of securities because the prices of these securities are generally denominated or quoted in currencies other than the U.S. dollar. Fluctuations in currency exchange rates can also affect a country's or company's ability to service its debt.

Special Risks of Investing in Asian Securities

In addition to the risks of foreign investments and emerging market countries investments described above, investments in Asia are subject to other risks.

The economies of Asian countries are at varying levels of development. Markets of countries whose economies are in the early stages of development may exhibit a high concentration of market capitalization and have less trading volume, lower liquidity, and more volatility than more developed markets. Some Asian countries depend heavily on foreign trade. The economies of some Asian countries are not diversified and are based on only a few commodities or industries.

Investments in Asia also are susceptible to social, political, legal, and operational risks. Some countries have authoritarian or relatively unstable governments. Some governments in the region provide less supervision and regulation of their financial markets and in some countries less financial information is available than is typical of more developed markets. Some Asian countries restrict direct foreign investment in securities markets, and investments in securities traded on those markets may be made, if at all, only indirectly (e.g., through Depositary Receipts, as defined below in the "Investment Glossary" section).

Asian countries periodically experience increases in market volatility and declines in foreign currency exchange rates. Currency fluctuations affect the value of securities because the prices of these securities are generally denominated or quoted in currencies other than the U.S. dollar. Fluctuations in currency exchange rates can also affect a country's or company's ability to service its debt.

The political and economic prospects of one Asian country or group of Asian countries can affect other countries in the region. For example, the economies of some Asian countries are directly affected by Japanese capital investment in the region and by Japanese consumer demands. In addition, a recession, a debt crisis, or a decline in currency valuation in one Asian country may spread to other Asian countries. Continuing hostility and the potential for future political or economic disturbances between China and Taiwan may have an adverse impact on the values of investments in either China or Taiwan, or make investments in China and/or Taiwan impractical or impossible. Any escalation of hostility between China and Taiwan would likely distort Taiwan's capital accounts, as well as have a significant adverse impact on the value of a Fund's investments in both countries, and in other countries in the region.


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Baillie Gifford Funds – Statement of Additional Information

Special Risk Considerations of Investing in China

Investing in securities of Chinese issuers, including by investing in A Shares, involves certain risks and considerations not typically associated with investing in securities of U.S. issuers, including, among others, (i) more frequent (and potentially widespread) trading suspensions and government interventions with respect to Chinese issuers, resulting in a lack of liquidity and in price volatility, (ii) currency revaluations and other currency exchange rate fluctuations or blockage, (iii) the nature and extent of intervention by the Chinese government in the Chinese securities markets, whether such intervention will continue and the impact of such intervention or its discontinuation, (iv) the risk of nationalization or expropriation of assets, (v) the risk that the Chinese government may decide not to continue to support economic reform programs, (vi) limitations on the use of brokers, (vii) potentially higher rates of inflation, (viii) the unreliability of some economic data, (ix) the relatively small size and absence of operating history of many Chinese companies, (x) accounting, auditing and financial reporting standards in China are different from U.S. standards and, therefore, disclosure of certain material information may not be available, (xi) greater political, economic, social, legal and tax-related uncertainty, (xii) higher market volatility caused by any potential regional territorial conflicts or natural disasters, (xiii) higher dependence on exports and international trade, (xiv) the risk of increased trade tariffs, sanctions, embargoes and other trade limitations, (xv) restrictions on foreign ownership, (xvi) custody risks associated with investing through the qualified foreign investor program or other programs to access Chinese securities, (xvii) U.S. sanctions or other investment restrictions with respect to Chinese issuers which could preclude a Fund from making certain investments or cause a Fund to sell investments at a disadvantageous time, and (xviii) risks associated with variable interest entity ("VIE") structures. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese issuers have the ability to suspend the trading of their equity securities, and have shown a willingness to exercise that option in response to market volatility and other events. The liquidity of Chinese securities may shrink or disappear suddenly and without warning as a result of adverse economic, market or political events, or adverse investor perceptions, whether or not accurate.

Certain Funds may invest in A Shares listed and traded on the Shanghai Stock Exchange or Shenzhen Stock Exchange through the Stock Connect program, or on such other stock exchanges in China which participate in the Stock Connect program from time to time. A Fund's investments in Stock Connect A Shares are generally subject to Chinese securities regulations and listing rules, among other restrictions that may affect the Fund's investments and returns, including daily limits on net purchases and transfer restrictions. In addition, the Stock Connect program's trading, clearance and settlement procedures are relatively untested in China, which could pose risks to the Fund. While overseas investors currently are exempt from paying capital gains or value added taxes on income and gains from investments in Stock Connect A Shares, these Chinese tax rules could be changed, which could result in unexpected tax liabilities for the Fund.

The Stock Connect program will only operate on days when both the Chinese and Hong Kong markets are open for trading and when banks in both markets are open on the corresponding

settlement days. There may be occasions when a Fund may be subject to the risk of price fluctuations of A Shares during the time when the Stock Connect program is not trading. Because of the way in which China A shares are held in Stock Connect, a Fund may not be able to exercise the rights of a shareholder and may be limited in its ability to pursue claims against the issuer of a security, and may suffer losses in the event the depository of the Shanghai or Shenzhen Stock Exchanges becomes insolvent. Only certain China A shares are eligible to be accessed through the Stock Connect program. Such securities may lose their eligibility at any time, in which case they presumably could be sold but could no longer be purchased through the Stock Connect program. The Stock Connect program is a relatively new program. Further developments are likely and there can be no assurance as to the program's continued existence or whether future developments regarding the program may restrict or adversely affect the Fund's investments or returns. In addition, the application and interpretation of the laws and regulations of Hong Kong and China, and the rules, policies or guidelines published or applied by relevant regulators and exchanges in respect of the Stock Connect program are uncertain, and they may have a detrimental effect on a Fund's investments and returns.

Certain Funds may also gain investment exposure to certain Chinese companies through VIE structures. Such investments are subject to the investment risks associated with the Chinese-based company. The VIE structure enables foreign investors, such as the relevant Fund, to obtain investment exposure to a Chinese company in situations in which the Chinese government has limited or prohibited the non-Chinese ownership of such company. The VIE structure does not involve direct equity ownership in a China-based company, but instead establishes claims to the China-based company's profits and control of the company's assets through contractual arrangements. A Fund will typically have little or no ability to influence VIE through proxy voting or other means because it is not a VIE owner/shareholder. Recently, China has proposed the adoption of rules which would affirm that VIE-structured overseas listings are legally permissible. If, however, the Chinese government were to determine that the contractual arrangements establishing the VIE structure did not comply with Chinese law or regulations, the Chinese operating company could be subject to penalties, revocation of its business and operating license, or forfeiture of ownership interests. Further intervention by the Chinese government with respect to any existing VIE structures could significantly affect the relevant Chinese operating company's performance and thus, the value of the Fund's investment through a VIE structure, as well as the enforceability of the contractual arrangements of the VIE structure. It remains unclear whether any new laws, rules or regulations relating to VIE structures will be adopted or, if adopted, what impact they would have on the interests of foreign shareholders. Control over a VIE may also be jeopardized if a natural person who holds the equity interest in the VIE breaches the terms of the contractual arrangements, is subject to legal proceedings, or if any physical instruments such as seals are used without authorization. In the event of such an occurrence, a Fund, as a foreign investor, may have little or no legal recourse. In addition to the risk of government intervention, investments through a VIE structure are subject to the risk that the China-based company (or its officers,


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Baillie Gifford Funds – Statement of Additional Information

directors, or Chinese equity owners) may breach the contractual arrangements, or Chinese law changes in a way that adversely affects the enforceability of the arrangements, or the contracts are otherwise not enforceable under Chinese law, in which case a Fund may suffer significant losses on its investments through a VIE structure with little or no recourse available.

Special Risks of Investing in Latin American Securities

Although there have been significant improvements in recent years, the Latin American economies continue to experience significant problems.

Inflation and rapid fluctuations in inflation rates have had and may continue to have very negative effects on the economies and securities markets of certain Latin American countries.

The emergence of the Latin American economies and securities markets will require continued economic and fiscal discipline which has been lacking at times in the past, as well as stable political and social conditions. There is no assurance that economic initiatives will be successful. Recovery may also be influenced by international economic conditions, particularly those in the U.S., and by world prices for oil and other commodities.

Special Risks of Investing in Eastern European Securities

Specific risks vary greatly between the various Eastern European markets, but they include, among others, corporate governance, fiscal stability, banking regulations, European Union accession and continued membership, global commodity prices, political stability and market liquidity.

For example, in February 2022, Russia commenced a military invasion of Ukraine. The outbreak of hostilities could result in more widespread conflict and has had an adverse effect on the region and the markets for securities, as well as ramifications beyond just Russia and Ukraine. Russia's invasion of Ukraine has led to, and may lead to additional, sanctions being levied by the United States, European Union and other countries and organizations against Russia and Belarus. These sanctions froze certain Russian assets and prohibited, among other things, trading in certain Russian securities and doing business with specific Russian corporate entities, large financial institutions, officials and oligarchs. The sanctions also included the removal of some Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), an electronic network that connects banks globally, and imposed restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. Russia's invasion and the resulting sanctions have affected and could continue to affect global energy, commodity and financial markets, and thus have affected and could in the future affect the value of a Funds' investments. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial, and may put significant pressure on global financial systems, including on banks and custodians. The market capitalizations of many Russian companies have already experienced significant declines, and Russia closed its securities markets for an extended period of time, before reopening with limited trading, though in the most part to Russian investors only. These market disruptions have and may continue to result in the decline in the value and liquidity of Russian securities, extreme

volatility in the Russian currency, a downgrade in Russia's credit rating, the inability to freely trade sanctioned companies (either due to the sanctions imposed or related operational issues) and/or other impacts on the Russian economy, any of which could negatively impact a Fund's investments in Russian securities. Sanctions could result in the immediate freeze of Russian securities, impairing the ability of a fund to buy, sell, receive or deliver those securities. Both the current and potential future sanctions and other government actions against Russia also could result in Russia taking counter measures or retaliatory actions, which may impair further the value or liquidity of Russian securities and negatively impact a Fund or the broader global markets. Any or all of these potential results could lead Russian and other economic regions into a recession. A number of large corporations and U.S. states have also announced plans to divest interests or otherwise curtail business dealings with certain Russian businesses. These sanctions and any additional sanctions or other intergovernmental actions that may be undertaken against Russia or other countries that support Russia's military invasion in the future may result in the devaluation of Russian or other affected currencies, a downgrade in the sanctioned country's credit rating, and a decline in the value and liquidity of Russian securities and securities of issuers in other countries that support the invasion.

In addition, beyond the effects of the Russian invasion of Ukraine and the related sanctions, the social, political, legal, and operational risks of investing in Russian issuers, and of having assets held in custody within Russia, may be particularly pronounced relative to investments in more developed countries. Russia's system of share registration and custody creates certain risks of loss (including the risk of total loss) that are not normally associated with investments in other securities markets. Ownership of shares (except where shares are held through depositories that meet the requirements of the 1940 Act) is defined according to entries in the company's share register and normally evidenced by "share extracts" from the register or, in certain circumstances, by formal share certificates. However, there is no central registration system for shareholders and these services are carried out by the companies themselves or by registrars located throughout Russia. The share registrars are controlled by the issuer of the security, and investors are provided with few legal rights against such registrars. These registrars are not necessarily subject to effective state supervision, nor are they licensed with any governmental entity. It is possible for a Fund to lose its registration through fraud, negligence, or even mere oversight. Where necessary, the Funds will endeavor to ensure that their interests are appropriately recorded, which may involve a custodian or other agent inspecting the share register and obtaining extracts of share registers through regular confirmations. However, these share extracts have no legal enforceability and it is possible that a subsequent illegal amendment or other fraudulent act may deprive the Funds of their ownership rights or improperly dilute their interests. In addition, while applicable Russian regulations impose liability on registrars for losses resulting from their errors, it may be difficult for a Fund to enforce any rights it may have against the registrar or issuer of the securities in the event of a loss of share registration. Further, significant delays or problems may occur in registering the transfer of securities, which could cause a Fund to incur losses due to a counterparty's failure to


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Baillie Gifford Funds – Statement of Additional Information

pay for securities the Fund has delivered or the Fund's inability to complete its contractual obligations because of theft or other reasons.

Special Risks of Investing in South African Securities

Specific risks include the transfer of assets to Black Economic Empowerment groups, tax increases, corporate governance, banking regulations, commodity prices, political changes and asset appropriation.

Special Risks of Investing in Middle Eastern Securities

Specific risks include political uncertainty and instability, widespread unemployment and social unrest. In addition, many economies in the Middle East are highly reliant on income from sales of oil or trade with countries involved in the sale of oil, and their economies are therefore vulnerable to changes in the market for oil and foreign currency values.

Special Risks of Focused Investments in Growth Companies

As described in the Prospectus, all of the Funds list both "Focused Investment Risk" and "Growth Stock Risk" as principal risks, and may take on significant exposure to a small number of growth stock issuers, or to a broader portfolio consisting predominantly of growth companies, which can create outsize risk. This is, in part, because, historically, growth companies are disproportionately prevalent in certain industries (such as those relating to the Internet, software and semiconductors), which tend to be particularly prone to loss and wide fluctuation in price. Furthermore, growth companies in these types of industries may have a tendency periodically to decrease in price at roughly the same time, which can further hinder the ability of portfolio managers to diversify risks of loss.

For example, if a Fund takes focused positions in internet and software companies, it is particularly vulnerable to rapid price declines of its internet and software company holdings due to changes in technological product cycles, evolving industry standards, changes in government regulation and policies, loss or impairment of patents and other intellectual property, restrictions on Internet usage or access, damage to the internet infrastructure, obsolescence caused by scientific and technological advances, availability and price of components and acceptance of and changing customer demand. The failure of an internet or software company to adapt to such changes could have a material adverse effect on the company's business, results of operations and financial condition and therefore a Fund with outsize positions in such companies is subject to greater loss than a more diversified fund.

Similarly, by way of further example, focused investments in the semiconductor industry could make a Fund particularly vulnerable to certain unique risks of investments. For example, semiconductor businesses are particularly vulnerable to loss as a result of wide fluctuations in securities prices due to risks of rapid obsolescence of products and related technology; economic performance of the customers of semiconductor and related companies; limited product lines, markets, financial resources or quality management and personnel. Additionally, investments in semiconductor companies may also be affected by risks that affect the broader technology sector, including: government regulation, dramatic and often unpredictable changes in growth

rates and competition for qualified personnel, a small number of companies representing a large portion of the semiconductor industry as a whole, cyclical market patterns, significant product price erosion hampering company profits, periods of over-capacity and production shortages, changing demand, variations in manufacturing costs and yields and significant expenditures for capital equipment and product development.

Forward Foreign Currency Transactions

Each Fund may invest in forward foreign currency transactions. In a forward foreign currency contract, a Fund agrees to buy in the future an amount in one currency in return for another currency, at an exchange rate determined at the time the contract is entered into. If currency exchange rates move against the Fund's position during the term of the contract, the Fund will lose money on the contract. There is no limit on the extent to which exchange rates may move against a Fund's position. The markets for certain currencies may at times become illiquid, and a Fund may be unable to enter into new forward contracts or to close out existing contracts. Forward currency contracts are entered into in the over-the-counter market, and a Fund's ability to profit from a contract will depend on the willingness and ability of its counterparty to perform its obligations under the contract. Use by the Funds of foreign currency forward contracts may also give rise to leverage.

Initial Public Offerings

Each Fund may purchase securities in initial public offerings ("IPOs"). These securities are subject to many of the same risks of investing in companies with smaller market capitalizations. Securities issued in IPOs have no trading history, and information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile. At any particular time or from time to time a Fund may not be able to invest in securities issued in IPOs, or invest to the extent desired because, for example, only a small portion (if any) of the securities being offered in an IPO may be made available to such Fund. In addition, under certain market conditions a relatively small number of companies may issue securities in IPOs. Similarly, as the number of funds to which IPO securities are allocated increases, the number of securities issued to any one fund, if any, may decrease. The investment performance of a Fund during periods when it is unable to invest significantly or at all in IPOs may be lower than during periods when the Fund is able to do so. In addition, as a Fund increases in size, the impact of IPOs on the Fund's performance will generally decrease.

Legal and Regulatory Risk

Legal, tax, and regulatory changes could occur that may adversely affect the Funds. New (or revised) laws or regulations or interpretations of existing law may be issued by the U.S. Internal Revenue Service (the "IRS") or U.S. Treasury Department, the U.S. Commodity Futures Trading Commission (the "CFTC"), the SEC, the U.S. Federal Reserve or other banking regulators, or other governmental regulatory authorities, or self-regulatory organizations that supervise the financial markets that could adversely affect the Funds. In particular, these agencies are empowered to promulgate a variety of new rules pursuant to recently enacted financial reform legislation in the U.S.


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Baillie Gifford Funds – Statement of Additional Information

The Funds also may be adversely affected by changes in the enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self-regulatory organizations. In addition, the securities and futures markets are subject to comprehensive statutes, regulations, and margin requirements. The CFTC, the SEC, the Federal Deposit Insurance Corporation, other regulators, and self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies.

The regulation of derivatives transactions and funds that engage in such transactions is an evolving area of law and is subject to modification by government and judicial action. As described above under "Risks Associated with Derivatives Regulation," the SEC recently adopted new Rule 18f-4 under the 1940 Act which applies to certain Funds' use of derivative investments and certain financing transactions (e.g., reverse repurchase agreements).

Finally, regulations require any creditor that makes a loan and any securitizer of a loan to retain at least 5% of the credit risk on any loan that is transferred, sold or conveyed by such creditor or securitizer. It is currently unclear how these requirements would apply to loan participations, syndicated loans, and loan assignments.

LIBOR

Many financial instruments use or may use a floating rate based on the London-Interbank Offered Rate ("LIBOR"). which is the offered rate for short-term Eurodollar deposits between major international banks. In 2017, the U.K.'s Financial Conduct Authority which regulates LIBOR, announced its intention to cease compelling banks to provide the quotations needed to sustain LIBOR from the end of 2021. ICE Benchmark Administration, the administrator of LIBOR, ceased publication of many of its LIBOR settings on a representative basis at the end of 2021 and is expected to cease publication on a representative basis of certain commonly used tenors of U.S. dollar LIBOR after June 30, 2023. In addition, global regulators have announced that, with limited exceptions, no new LIBOR-based contracts should be entered into after the end of 2021. The transition away from and elimination of LIBOR may adversely affect the interest rates on, and value of, certain investments for which the value is tied to LIBOR. Such investments may include bank loans, derivatives, floating rate securities, and other assets or liabilities tied to LIBOR. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies (e.g., the Secured Overnight Financing Rate ("SOFR") for U.S. dollar LIBOR and the Sterling Overnight Interbank Average Rate for GBP LIBOR). Market participants are focused on the transition mechanisms by which the reference rate in existing contracts or instruments may be amended, whether through market wide protocols, fallback contractual provisions, bespoke negotiations or amendments, or otherwise. Generally speaking, for contracts that do not contain a fallback provision as described in the U.S. Adjustable Interest Rate Act, a benchmark replacement recommended by the Federal Reserve Board will effectively automatically replace the USD LIBOR benchmark in the contract after June 30, 2023. The recommended benchmark replacement will be based on the SOFR published by the Federal Reserve Bank of New York, including certain spread adjustments and benchmark

replacement conforming changes. Various financial industry groups have been planning for the transition away from LIBOR. Markets are developing in response to these new rates but, questions around liquidity impacted by these rates, and how to appropriately adjust these rates at the time of transition, remain a concern for the Funds.

The effect of any changes to, or discontinuation of, LIBOR on the Funds will vary depending, among other things, on (1) existing fallback or termination provisions in individual contracts and (2) whether, how, and when industry participants develop and adopt new reference rates and fallbacks for both legacy and new products and instruments. Accordingly, it is difficult to predict the full impact of the transition away from LIBOR on the Funds until new reference rates and fallbacks for both legacy and new products, instruments and contracts are commercially accepted. The transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that rely on LIBOR. The transition may also result in a reduction in the value of certain LIBOR-based investments held by the Fund or reduce the effectiveness of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could result in losses for the Fund. Since the usefulness of LIBOR as a benchmark could also deteriorate during the transition period, effects could occur at any time.

Liquidity Risk

Illiquid investments are any investments that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Liquidity risk is the risk that a Fund may not be able to dispose of securities or close out derivatives transactions readily at a favorable time or prices (or at all) or at prices approximating those at which a Fund currently values them. Liquidity risk may be magnified during periods of changing interest rates, significant shareholder redemptions or market turmoil. For example, certain investments may be subject to restrictions on resale, may trade in the over-the-counter market or in limited volume, or may not have an active trading market. Illiquid investments may trade at a discount from comparable, more liquid investments and may be subject to wide fluctuations in market value. It may be difficult for a Fund to value illiquid investments accurately. The market for certain investments may become illiquid under adverse market or economic conditions independent of any specific adverse changes in the conditions of a particular issuer. Disposal of illiquid investments may entail registration expenses and other transaction costs that are higher than those for liquid investments. A Fund may seek to borrow money to meet its obligations (including among other things redemption obligations) if it is unable to dispose of illiquid investments, resulting in borrowing expenses and possible leveraging of the Fund.

In accordance with Rule 22e-4 under the 1940 Act, the Board has appointed the Manager as the Funds' liquidity risk management program administrator and has approved a liquidity risk management program for the Funds. The Manager expects to continue to implement the program through its liquidity risk management team. Under the program, each Fund must assess and manage its liquidity risk, including classifying investments


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Baillie Gifford Funds – Statement of Additional Information

into specific liquidity categories, and maintaining a portion of its holdings in cash and assets that can be converted to cash within three business days. While the Funds' liquidity risk management program attempts to assess and manage liquidity risk, there is no guarantee it will be effective in its operations and may not reduce the liquidity risk inherent in a Fund's investments.

Non-U.S. Tax Risk

A Fund may be subject to non-U.S. taxation, including potentially on a retroactive basis, on (i) capital gains it realizes or dividends, interest, or other amounts it realizes or accrues in respect of non-U.S. investments; (ii) transactions in those investments; and (iii) repatriation of proceeds generated from the sale or other disposition of those investments. A Fund may seek a refund of taxes paid, but its efforts may not be successful, in which case the Fund will have incurred additional expenses for no benefit. A Fund's pursuit of such refunds may subject the Fund to various administrative and/or judicial proceedings. A Fund's decision to seek a refund is in its sole discretion, and, particularly in light of the cost involved, it may decide not to seek a refund, even if it is entitled to one. The outcome of a Fund's efforts to obtain a refund is inherently unpredictable. Accordingly, a refund is not typically reflected in a Fund's net asset value until it is received or until the Manager is confident that the refund will be received. In some cases, the amount of a refund could be material to a Fund's net asset value.

Preferred Stocks

Investment in preferred stocks involves certain risks. Depending on the features of the particular security, holders of preferred stock may bear the risks disclosed in the Prospectus or this SAI regarding equity securities or interest rates. Certain preferred stocks contain provisions that allow an issuer under certain conditions to skip or defer distributions. If a Fund owns a preferred stock that is deferring its distribution, it may be required to report income for tax purposes despite the fact that it is not receiving current income on this position. Preferred stocks often are subject to legal provisions that allow for redemption in the event of certain tax or legal changes or at the issuer's call. In the event of redemption, a Fund may not be able to reinvest the proceeds at comparable rates of return. Preferred stocks are subordinated to bonds and other debt securities in an issuer's capital structure in terms of priority for corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt securities. Preferred stocks may trade less frequently and in a more limited volume and may be subject to more abrupt or erratic price movements than many other securities, such as common stocks, corporate debt securities, and U.S. government securities.

Repurchase Agreements

If the seller under a repurchase agreement becomes insolvent, a Fund's right to dispose of the securities may be restricted. In the event of the commencement of bankruptcy or insolvency proceedings with respect to the seller of the security under a repurchase agreement, a Fund may encounter delay and incur costs before being able to sell the security. Also, if a seller defaults, the value of such securities may decline before a Fund is able to dispose of them.

Restricted Securities

Restricted securities may be less liquid than securities registered for sale to the general public. The liquidity of a restricted security may be affected by a number of factors, including, among others: (i) the creditworthiness of the issuer; (ii) the frequency of trades and quotes for the security; (iii) the number of dealers willing to purchase or sell the security and the number of other potential purchasers; (iv) dealer undertakings to make a market in the security; (v) the nature of any legal restrictions governing trading in the security; and (vi) the nature of the security and the nature of marketplace trades. There can be no assurance that a liquid trading market will exist at any time for any particular restricted security. Also, restricted securities may be difficult to value because market quotations may not be readily available, and the securities may have significant volatility.

Section 4(a)(2) Commercial Paper and Rule 144A Securities

The Funds may invest in Section 4(a)(2) paper, which is sold to institutional investors who agree to purchase the paper for investment and not with a view to public distribution. Any resale by the purchaser must be in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "1933 Act"). Section 4(a)(2) paper normally is resold to other institutional investors like the Funds through or with the assistance of the issuer or investment dealers that make a market in Section 4(a)(2) paper. As a result, Funds purchasing such securities will be exposed to liquidity risk, the risk that the securities may be difficult to value because of the absence of an active market and the risk that it may be sold only after considerable expense and delay, if at all. Rule 144A securities generally must be sold only to other qualified institutional buyers. Section 4(a)(2) paper and Rule 144A securities will be presumed illiquid for purposes of the Fund's limitation on illiquid investments unless the Manager (pursuant to the liquidity risk management program adopted by the Board) as the program administrator determines that the securities in question can be sold within five trading days. If any Fund determines at any time that it owns illiquid investments in excess of 15% of its net assets, it will cease to undertake new commitments to acquire illiquid investments until its holdings are no longer in excess of 15% of its net asset value, report the occurrence in compliance with Rule 22e-4 and Rule 30b1-10 under the 1940 Act and, depending on circumstances, may take additional steps to reduce its holdings of illiquid investments. There can be no assurance that a liquid trading market will exist at any time for any particular Section 4(a)(2) paper or Rule 144A securities.

Special Purpose Acquisition Companies

Each Fund may also invest in stock, rights, warrants, and other securities offered in IPOs of special purpose acquisition companies or similar special purpose entities (collectively "SPACs"). A SPAC is a publicly traded company that raises investment capital in the form of a blind pool via an IPO for the purpose of acquiring an existing company.

The typical SPAC IPO involves the sale of units consisting of one share of common stock combined with one or more warrants or fractions of warrants to purchase common stock at a fixed price upon or after consummation of the acquisition. Shortly after the SPAC's IPO, such units typically are split into publicly listed common stock and warrants (and rights, if applicable) which are


13


Baillie Gifford Funds – Statement of Additional Information

each listed and traded separately. The proceeds from the IPO are placed in trust until such time that the SPAC identifies and consummates the acquisition. A SPAC generally invests the proceeds of its IPO (less a portion retained to cover expenses), which are held in trust, in U.S. government securities, money market securities and cash. If the SPAC does not complete the acquisition within a specified period of time after going public, the SPAC is dissolved, at which point the invested funds are returned to the entity's shareholders (less certain permitted expenses), possibly on a delayed timeframe and at an unfavorable price, and any rights or warrants issued by the SPAC expire worthless.

Because SPACs and similar entities have no operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity's management to identify and complete a profitable acquisition. Some SPACs may pursue acquisitions only within certain industries or regions, which may increase the volatility of their prices.

Warrants

The risks of a warrant are similar to the risks of a purchased call option. Warrants may lack a liquid secondary market for resale. The prices of warrants may fluctuate as a result of changes in the value of the underlying security or obligation or due to speculation in the market for the warrants or other factors. Prices of warrants do not necessarily move in tandem with the prices of their underlying securities; their prices may have significant volatility and it is possible that a Fund will lose its entire investment in a warrant. A Fund's failure to exercise a warrant or subscription right to purchase common shares in an issuer might result in the dilution of the Fund's interest in the issuing company.

Disclosure of Fund Investments

The Board has adopted policies and procedures with respect to the disclosure of the Funds' portfolio holdings (the "Disclosure Policies"). The Board may modify the Disclosure Policies at any time without notice.

The Disclosure Policies permit specific details about securities or other instruments held by a Fund, non-public information about a Fund's recent trading strategies (i.e., since the last public disclosure of the Fund's portfolio holdings), or a Fund's pending or anticipated transactions (such details, "Portfolio Holdings Information") to be disclosed prior to the time that such information is publicly disclosed only to (i) the Manager and its affiliates, (ii) third party service providers who require access to the information to fulfill their duties to a Fund (including the Trust's custodian and administrator, transfer agent, independent registered public accounting firm, legal counsel, financial printer and filing agent, broker-dealers when requesting bids for or price quotations on securities and brokers in the normal course of trading), and (iii) shareholders and prospective shareholders (or their consultants and agents) of the Funds under the circumstances described below.

Quarterly Disclosure

In accordance with the Disclosure Policies, the Manager will disclose a full list of portfolio holdings of the Funds as of the end of each calendar quarter at http://USmutualfund.bailliegifford.com with a lag time of approximately 10 calendar days, but no fewer than 8 calendar days, after the end of the quarter.

Monthly Disclosure

In addition to quarterly disclosures, the Manager will make available partial Portfolio Holdings Information in monthly reports at http://USmutualfund.bailliegifford.com with a lag time of approximately, but no fewer than, 8 calendar days after the end of each month. Each such monthly report may include top holdings, top and bottom contributors, and the weighting of holdings by region, sector, or geographical location.

Significant Events

Subject to the approval by the Trust's Chief Executive Officer or Chief Compliance Officer (each, being an "Authorizing Person"), the Manager may also publicly disclose on the Funds' website at http://USmutualfund.bailliegifford.com additional Portfolio Holdings Information with respect to one or more Funds in periods of significant market unrest or in other exigent circumstances. Periods of significant market unrest may include, but are not limited to, times of war, national or global financial emergency, public health crises, significant geopolitical events, natural and environmental disasters, civil unrest, and terrorism. Any such postings will be available on the website until the relevant Fund files its Form N-CSR or quarter-end Form N-PORT for the period that includes the date as of which such posting is current.

Ongoing Arrangements

The Manager has entered into ongoing arrangements to provide Portfolio Holdings Information to the following persons or entities in order to fulfill their duties with respect to the Funds:

Entity

  Reason for
disclosure
 

Frequency

  Delay Before
Dissemination
 

Baillie Gifford Overseas Limited and its affiliates

 

To fulfill duties as Manager of the Funds

 

Daily

 

None

 

The Bank of New York Mellon

 

To fulfill duties as custodian, administrator, and transfer agent of the Funds

 

Daily

 

None

 

Cohen & Company, Ltd.

 

To fulfill duties as independent registered public accounting firm of the Funds

 

During annual audit and semi-annual cursory review

 

None

 

Ropes & Gray LLP

 

To fulfill duties as legal counsel to the Trust

 

For regulatory filings, board meetings, and other relevant legal issues

 

None

 

Toppan Merrill

 

To fulfill duties as financial printer and filing agent for the Funds

 

For regulatory filings and other printing purposes

 

None

 

Broker-dealers

 

When requesting bids for or price quotations on securities and brokers in the normal course of trading

 

Upon request

 

Five days

 


14


Baillie Gifford Funds – Statement of Additional Information

Conditional Disclosure

In accordance with the Disclosure Policies, the Manager may also disclose Portfolio Holdings Information to other persons if the following three conditions are met:

1.  The recipients are subject to a confidentiality agreement with respect to such information, which includes a prohibition on trading on such information and the recipient's agreement to destroy the information upon a written request from the Manager.

2.  An Authorizing Person determines that disclosure is in the best interest of a Fund and its shareholders.

In determining whether disclosure is in the best interests of a Fund and its shareholders, the Authorizing Person shall consider whether any potential conflicts exist between the interests of Fund shareholders and the Manager and its affiliates.

3.  The information is limited to that which the Manager believes is reasonably necessary to serve the purposes for which disclosure has been approved.

The Manager must also report any such disclosures to the Board at their next regularly scheduled meeting. This report must then be maintained by the Chief Compliance Officer or his/her designee for 6 years from the end of the fiscal year in which any exception was granted, the first 2 years in an easily accessible place. The Trust may modify its policies and procedures regarding disclosure of Portfolio Holdings Information at any time without notice.

Disclosure Practices for Other Parties

The Manager and its affiliates advise and/or sub-advise registered investment companies and other pooled investment vehicles, which may be subject to different portfolio holdings disclosure policies than the Funds. Neither the Manager nor the Board exercises control over such policies. In addition, the separate account clients of the Manager and its affiliates have access to their portfolio holdings and are not subject to the Funds' portfolio holdings disclosure policies. In addition, some of these funds or separately managed accounts advised by the Manager have substantially similar investment objectives and strategies as the Funds and therefore potentially similar portfolio holdings as the Funds.

Compensation for Disclosure

A Fund's Portfolio Holdings Information may not be disclosed for compensation.

Investment Glossary

This section provides definitions of various terms, securities and investment techniques included in the Prospectus and this SAI. This SAI does not attempt to disclose all of the various types of securities and investment techniques that may be used by the Funds. As with any mutual fund, investors in the Funds must rely on the professional investment judgment and skill of the Manager and the individual portfolio managers.

Asia

References in the Prospectus and this SAI to "Asia" denote the region encompassing China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand as well as other countries located in Asia, as determined by the Manager.

Australasia

References in the Prospectus and this SAI to "Australasia" denote the region encompassing New Zealand, Australia, Papua New Guinea, and neighboring islands in the Pacific Ocean.

Common Stocks

Common stock represents an ownership interest in a company. Common stock may take the form of shares in a corporation, membership interests in a limited liability company, limited partnership interests, or other forms of ownership interests.

Convertible Securities

Convertible securities are fixed income securities that may be converted at either a stated price or a stated rate into underlying shares of common stock. Convertible securities have general characteristics similar to both fixed income and equity securities. Although to a lesser extent than with fixed income securities generally, the market value of convertible securities tends to decline as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature, the market value of convertible securities tends to vary with fluctuations in the market value of the underlying common stocks and, therefore, also will react to variations in the general market for equity securities.

Like fixed income securities, convertible securities are investments which provide for a stable stream of income with generally higher yields than common stocks. Of course, like all fixed income securities, there can be no assurance of current income because the issuers of the convertible securities may default on their obligations. Convertible securities, however, generally offer lower interest or dividend yields than non-convertible securities of similar quality because of the potential for capital appreciation. A convertible security, in addition to providing fixed income, offers the potential for capital appreciation through the conversion feature, which enables the holder to benefit from increases in the market price of the underlying common stock. However, there can be no assurance of capital appreciation because securities prices fluctuate.

Convertible securities generally are subordinated to other similar but non-convertible securities of the same issuer, although convertible bonds enjoy seniority in right of payment to all equity securities, and convertible preferred stock is senior to common stock of the same issuer. Because of the subordination feature, however, convertible securities typically have lower ratings than similar non-convertible securities.

Currency Forward Contracts

In a forward foreign currency contract, a Fund agrees to buy in the future an amount in one currency in return for another currency, at an exchange rate determined at the time the contract is entered into.


15


Baillie Gifford Funds – Statement of Additional Information

Cyber-attacks

Cyber-attacks include, among other things, stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing confidential information without authorization, and causing operational disruption.

Depositary Receipts

Depositary Receipts generally evidence an ownership interest in a corresponding security on deposit with a financial institution. Transactions in Depositary Receipts usually do not settle in the same currency as the underlying securities are denominated or traded.

American Depositary Receipts are typically publicly traded trust receipts issued by a U.S. bank or trust company that evidence an indirect interest in underlying securities issued by a foreign entity.

Global Depositary Receipts ("GDRs"), European Depositary Receipts ("EDRs"), and other types of depositary receipts are typically issued by non-U.S. banks or financial institutions to evidence an interest in underlying securities issued by either a U.S. or a non-U.S. entity. EDRs, in bearer form, are designed for use in European securities markets. GDRs may be traded in any public or private securities markets and may represent securities held by institutions located anywhere in the world.

Derivatives

Generally, derivatives are financial contracts whose value depends upon, or is derived from, the value of an underlying asset, reference rate or index, and may relate to, among other things, stocks, bonds, interest rates, currencies or currency exchange rates, commodities, and related indexes.

Eastern European Securities

References in the Prospectus and this SAI to "Eastern European Securities" denote securities issued by companies located in Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Turkey or Ukraine, as well as other countries in Eastern Europe, as determined by the Manager.

Far Eastern Securities

References in the Prospectus and this SAI to "Far Eastern Securities" denote securities issued by companies located in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Taiwan, Thailand or Singapore, as well as other Asian countries, as determined by the Manager.

Industry

References in the Prospectus and this SAI to "Industries" has the meaning ascribed to this term by the Manager, from time to time.

Latin American Securities

References in the Prospectus and this SAI to "Latin American Securities" denote securities issued by companies located in Argentina, Brazil, Chile, Colombia, Mexico or Peru, as well as other countries located in Latin America, as determined by the Manager.

Non-U.S. Securities

The Funds may invest in non-U.S. securities. Non-U.S. securities may include, but are not limited to, securities of companies that are organized and headquartered outside the U.S.; non-U.S. equity securities as designated by commonly-recognized market data services; U.S. dollar- or non-U.S. currency-denominated corporate debt securities of non-U.S. issuers; securities of U.S. issuers traded principally in non-U.S. markets; non-U.S. bank obligations; U.S. dollar- or non-U.S. currency-denominated obligations of non-U.S. governments or their subdivisions, agencies and instrumentalities, international agencies and supranational entities; and securities of other investment companies investing primarily in non-U.S. securities. When assessing compliance with investment policies that designate a minimum or maximum level of investment in "non-U.S. securities" for a Fund, the Manager may apply a variety of factors (either in addition to or in lieu of one or more of the categories described in the preceding sentence) in order to determine whether a particular security or instrument should be treated as U.S. or non-U.S. For more information about how the Manager may define non-U.S. securities for purposes of a Fund's asset tests and investment restrictions, see the Fund's principal investments and strategies under "Principal Investment Strategies" in the Prospectus. For more information about how the Manager may determine whether an issuer is located in a particular country, see "Selected Investment Techniques and Topics—Location of Issuers" in the Prospectus.

Middle Eastern Securities

References in the Prospectus and this SAI to "Middle Eastern Securities" denote securities issued by companies located in Egypt, Israel, Qatar or United Arab Emirates, as well as other Middle Eastern countries as determined by the Manager.

Preferred Stocks

Preferred stocks include convertible and non-convertible preferred and preference stocks that are senior to common stock. Preferred stocks are equity securities that are senior to common stock with respect to the right to receive dividends and a fixed share of the proceeds resulting from the issuer's liquidation. Some preferred stocks also entitle their holders to receive additional liquidation proceeds on the same basis as holders of the issuer's common stock, and thus represent an ownership interest in the issuer.

Repurchase Agreements

A Fund may enter into repurchase agreements, by which the Fund purchases a security and obtains a simultaneous commitment from the seller (a bank or, to the extent permitted by the 1940 Act, a recognized securities dealer) to repurchase the security at an agreed upon price and date (usually seven days or less from the date of original purchase). The resale price is in excess of the purchase price and reflects an agreed upon market rate unrelated to the coupon rate on the purchased security. Such transactions afford the Fund the opportunity to earn a return on temporarily available cash at minimal market risk. While the underlying security may be a bill, certificate of indebtedness, note or bond issued by an agency, authority or instrumentality of the U.S. Government, the obligation of the seller is not guaranteed by the U.S. Government and there is a risk that the


16


Baillie Gifford Funds – Statement of Additional Information

seller may fail to repurchase the underlying security. In such event, the Fund would attempt to exercise rights with respect to the underlying security, including possible disposition in the market. However, the Fund may be subject to various delays and risks of loss, including (a) possible declines in the value of the underlying security during the period while the Fund seeks to enforce its rights thereto and (b) inability to enforce rights and the expenses involved in attempted enforcement.

Restricted Securities

The Funds may hold securities that have not been registered for sale to the public under the U.S. federal securities laws pursuant to an exemption from registration.

Rule 144A Securities

Rule 144A securities are securities that may be offered and sold only to "qualified institutional buyers" under Rule 144A of the 1933 Act.

Section 4(a)(2) Commercial Paper

The Funds may invest in commercial paper issued in reliance on the private placement exemption from registration afforded by Section 4(a)(2) of the 1933 Act. This commercial paper is commonly called "Section 4(a)(2) paper." Section 4(a)(2) paper is sold to institutional investors who must agree to purchase it for investment and not with a view to public distribution. Any resale by the purchaser must be in a transaction exempt from the registration requirements of the 1933 Act. Section 4(a)(2) paper normally is resold to other institutional investors like the Funds through or with the assistance of the issuer or investment dealers that make a market in Section 4(a)(2) paper.

Sector

References in the Prospectus and this SAI to "Sectors" has the meaning ascribed to this term by the Manager, from time to time.

Senior Securities

Under the 1940 Act, a "senior security" does not include any promissory note or evidence of indebtedness when such loan is for temporary purposes only and in an amount not exceeding 5% of the value of the total assets of the issuer at the time the loan is made.

South African Securities

References in the Prospectus and this SAI to "South African Securities" denote securities which are issued by companies located in South Africa.

Synthetic Convertible Securities

"Synthetic" convertible securities are selected based on the similarity of their economic characteristics to those of a traditional convertible security due to the combination of separate securities that possess the two principal characteristics of a traditional convertible security (i.e., an income producing component and a right to acquire an equity security). The income-producing component is achieved by investing in non-convertible, income-producing securities such as bonds, preferred stocks and money market instruments while the

convertible component is achieved by investing in warrants or options to buy common stock at a certain exercise price, or options on a stock index. Synthetic securities may also be created by third parties, typically investment banks or other financial institutions. Unlike a traditional convertible security, which is a single security having a unitary market value, a synthetic convertible consists of two or more separate securities, each with its own market value, and has risks associated with derivative instruments.

Warrants

The holder of a warrant or right typically has the right to acquire securities or other obligations from the issuer of the warrant or right at a specified price or under specified conditions.

Yankee Bonds

A Fund may invest in U.S. dollar-denominated bonds sold in the U.S. by non-U.S. issuers ("Yankee bonds"). As compared with bonds issued in the U.S., such bond issues normally carry a higher interest rate but are less actively traded.


17


Baillie Gifford Funds – Statement of Additional Information

Purchase, Redemption, and Pricing of Shares

How to Buy & Redeem Shares

The procedures for purchasing shares of a Fund are summarized in the Prospectus under "Shares—How to Buy Shares."

The procedures for redeeming shares of a Fund are summarized in the Prospectus under "Shares—How to Sell Shares."

Determination of Net Asset Value

As described in the Prospectus under the heading "Shares—How Shares are Priced," the net asset value per share of a Fund's shares of a particular class is determined by dividing the total market value of a Fund's portfolio investments and other assets attributable to that class, less any liabilities, by the total number of shares outstanding of that class. Each Fund's liabilities are allocated among its classes. The total of such liabilities allocated to a class plus any other expenses specially allocated to that class are then deducted from the class's proportionate interest in the Fund's assets, and the resulting amount for each class is divided by the number of shares of that class outstanding to produce the class's net asset value. The Prospectus further notes that the net asset value will be determined as of a particular time of day (the "Pricing Point") on any day on which the New York Stock Exchange ("NYSE") is open for unrestricted trading. The Pricing Point is normally at the scheduled close of unrestricted trading on the NYSE (generally 4:00 p.m. Eastern Time). In unusual circumstances, the Manager may determine that the Pricing Point shall be at an earlier, unscheduled close or halt of trading on the NYSE.

On December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which addresses valuation practices and the role of the board of directors with respect to the fair value of the investments of a registered investment company. Among other things, Rule 2a-5 permits a fund's board to designate the fund's primary investment adviser to perform the fund's fair value determinations, which is subject to board oversight and certain reporting and other requirements intended to ensure that the board receives the information it needs to oversee the investment adviser's fair value determinations.

The Board has adopted valuation procedures for valuing portfolio securities and other assets. The Manager periodically reviews and reports to the Board on the appropriateness and accuracy of the methodologies used to fair value the Funds' securities. BNYM, as the Funds' administrator, is responsible for the operational execution of the valuation process, and the Manager is responsible for the supervision of compliance with NAV calculation and pricing requirements. When readily available market quotations for portfolio securities and other assets are not available, fair value must be employed to calculate a Fund's NAV. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Manager as the "valuation designee" to determine the fair value, in good faith, of securities and other instruments for which no readily available market quotation exists. Baillie Gifford Group's Valuation Committee is a committee that oversees this responsibility on behalf of the Manager, and Baillie Gifford Group's Fair Value Pricing Group is responsible for the day-to-day administration of the Manager's duties, including the Manager's responsibilities as "valuation designee." The

Manager's role with respect to fair valuation may present certain conflicts of interest given the impact valuations can have on Fund performance and the Manager's asset-based fees.

Pricing Methodologies

The following summarizes the methods typically used to determine values for the noted types of securities or instruments by the administrator. If a security price cannot be obtained from an independent, third-party pricing agent, the administrator shall seek to obtain a bid price from at least one independent broker from a list provided by the Manager.

—  Equity securities listed on a securities exchange, market or other automated quotation system (including equity securities traded over the counter) for which quotations are readily available are valued at the last quoted trade price on the primary exchange or market (foreign or domestic) on which they are most actively traded on the date of valuation (or at approximately 4:00 p.m. Eastern Time if a security's primary exchange is normally open at that time), or, if there is no such reported sale on the date of valuation, at the most recent quoted bid price.

—  Debt instruments are generally fair valued by the valuation designee unless a particular instrument is determined to have readily available market quotations.

—  Futures contracts are generally valued at the settlement price established each day by the board of the exchange on which they are traded.

—  Over-the-counter derivatives and other financial derivatives for which no readily available market quotations exist are generally fair valued by the valuation designee.

—  Swaps are generally fair valued by the valuation designee.

—  Redeemable securities issued by open-end investment companies are generally valued at the investment company's applicable net asset value per share, with the exception of exchange-traded funds, which are generally priced as equity securities.

—  Foreign (non-U.S.) securities and instruments are priced based on the particular type of security (e.g., equity securities, debt securities, etc.), and may require fair valuation adjustments. Securities and other instruments traded on markets in time zones that differ significantly from Eastern Time may be routinely subject to the use of third-party fair valuation vendors and other fair value qualifications.

Election under Rule 18f-1

The Trust, on behalf of each Fund included in this SAI, has made an election pursuant to Rule 18f-1 under the 1940 Act committing each such Fund to pay in cash any request for redemption received during any 90-day period of up to the lesser of $250,000 or 1% of the Fund's net asset value at the beginning of the period. This election is irrevocable without prior approval by the SEC. Each Fund reserves the right to pay redemption proceeds in-kind except as described above.


18


Baillie Gifford Funds – Statement of Additional Information

Board Members and Trust Officers

Trustee Responsibilities and Powers

The Board is responsible for the overall management and supervision of the Trust's affairs and for protecting the interests of shareholders. The Board is composed of five Trustees, also referred to as Board members. Each Board member oversees, and each officer serves, all series of the Trust that constitute the Baillie Gifford Funds complex.

The Trust's Second Amended and Restated Agreement and Declaration of Trust dated February 27, 2017, as amended from time to time (the "Declaration of Trust") permits the Board to:

—  Issue shares. The Board can issue an unlimited number of full and fractional shares of beneficial interest of each series of the Trust (each a "Series Fund"). Each share of a Series Fund represents an equal proportionate interest in such Series Fund with each other share of that Series Fund and is entitled to a proportionate interest in the dividends and distributions from that Series Fund.

The Board can also subdivide any Series Fund into sub-series (or "Classes") of shares with such dividend preferences and other rights as the Board may designate. Each Series Fund is currently divided into at least two Classes. This power to subdivide Series Funds is intended to allow it to provide for an equitable allocation of the impact of any future regulatory requirements which might affect various classes of shareholders differently, or to permit shares of a Series Fund to be distributed through more than one distribution channel, with the costs of the particular means of distribution (or costs of related services) to be borne by the shareholders who purchase through that means of distribution. Each share of a Series Fund represents an equal proportionate interest in that Series Fund with each other share, subject to the different preferences of each Class of that Series Fund.

—  Establish new portfolios or series. The Board may establish one or more additional separate Series Funds (i.e., a new fund) or merge two or more existing Series Funds. Shareholders' investments in such an additional or merged portfolio may be evidenced by a separate Series Fund.

—  Charge shareholders. The Board may charge shareholders directly for custodial, transfer agency and servicing expenses.

—  Allocate other expenses. Any general expenses of the Trust that are not readily identifiable as belonging to a Series Fund are allocated in such a manner as to be fair and equitable. While the expenses of the Trust are allocated to the separate books of account of each Series Fund, certain expenses may be legally chargeable against the assets of all Series Funds.

—  Terminate the Trust or any Fund. The Board may terminate the Trust or any Series Fund upon written notice to the shareholders.

Trustee Appointments

The substantial professional accomplishments and prior experience, including, in some cases, in fields related to the operations of the Fund, were a significant factor in the

determination that the current Board members should serve as a Trustee. Generally, no one factor was decisive in the nomination or appointment of an individual to the Board.

Among the factors the Board considers when concluding that an individual should serve as a Board member are the following:

—  the individual's business and professional experience and accomplishments;

—  the individual's ability to work effectively with the other Trustees;

—  the individual's prior experience, if any, in the investment management industry; and

—  how the individual's skills, experience and attributes would contribute to an appropriate mix of relevant skills and experience on the Board.

Trustee Nominations by Shareholders

Any shareholder may nominate a person to become a Trustee. To nominate a person for the Nominating and Governance Committee's consideration, a shareholder must submit their recommendation in writing to the Trust, to the attention of the Trust's Secretary at c/o Baillie Gifford Overseas Limited, Calton Square, 1 Greenside Row, Edinburgh, United Kingdom EH1 3AN. The recommendation must include:

—  biographical information regarding the candidate, the number of shares of each Fund owned of record and beneficially by the candidate (as reported to the recommending shareholder by the candidate), any other information regarding the candidate that would be required to be disclosed if the candidate were a nominee in a proxy statement or other filing required to be made in connection with solicitation of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder, and whether the recommending shareholder believes that the candidate is or will be an "interested person" of the Trust, and, if not an "interested person," information regarding the candidate that will be sufficient for the Trust to make such determination;

—  the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee if elected;

—  the recommending shareholder's name as it appears on the Trust's books;

—  the number of all shares of each Fund owned beneficially and of record by the recommending shareholder; and

—  a description of all arrangements or understandings between the recommending shareholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made by the recommending shareholder.

In addition, the Nominating and Governance Committee may require the candidate to furnish such other information as it may deem necessary or appropriate to determine the eligibility of such candidate to serve as a Trustee of the Trust. The Nominating and Governance Committee considers and evaluates


19


Baillie Gifford Funds – Statement of Additional Information

nominee candidates properly submitted by shareholders on the same basis as it considers and evaluates candidates recommended by other sources. The Nominating and Governance Committee has full discretion to reject nominees

recommended by shareholders, and there is no assurance that it will determine to nominate any person, even if properly recommended and considered in accordance with this paragraph.

The following table sets out information on each of the Trustees, including an overview of the considerations that led the Board to conclude that each individual currently serving as a Trustee should serve as a Trustee.

Name and
Year of
Birth
(1)​

 

Position(s)
Held with
Trust

 

Length of
Time
Served as
Trustee

 

Principal
Occupation and
Other
Directorships
Held During
Past 5 Years

  Considerations relevant to
appointment as Trustee
(see also "
Trustees and Trust
Officers–Trustee Appointments"
above)
 

Number of
Portfolios
in Fund
Complex
(2)​
overseen
by Trustee

 

Dollar range(3)​ of Shares
held in each Fund (USD)

 

Aggregate
Dollar Range
(3)​
of Shares held
in Fund
Complex
(2)​
(USD)

 

 Independent Trustees    

             

Howard W. Chin
1952

 

Trustee, Chair of the Nominating and Governance Committee

 

Since 2015

 

Retired. Formerly: Managing Director, Investments, Guardian Life Insurance (financial services).

 

Howard W. Chin has over 25 years of professional experience in the asset management industry. Most recently, as Managing Director of Fixed Income Securities at Guardian Life Insurance Company of America until 2013, Mr. Chin was responsible for managing multi-billion dollar structured products portfolios for Guardian's mutual funds, and general account. In addition, Mr. Chin was a member of the Investment Committee that determined Guardian's asset allocation among the various fixed income sectors.

 

16

 

Baillie Gifford Long Term Global Growth Fund – Over $100,000

 

Over $100,000

 

Pamela M. J. Cox
1952

 

Trustee

 

Since 2017

 

Retired. Formerly: Senior Associate (non-resident), CSIS (think tank); Senior Vice President; Vice President East Asia, World Bank Group (international bank & financial services).

 

Pamela M. J. Cox has over 30 years of professional experience in the World Bank Group, providing investment project financing and economic policy advice. At the time of her retirement in 2013, she was Senior Vice President, leading strategy and business development. She previously held positions as Vice President East Asia and Vice President Latin America, overseeing business strategy, investment portfolios, operations, client relationships, policy formulation and governance. Since retiring, she has held positions as a Senior Associate (nonresident) at CSIS (think tank) and on nonprofit boards.

 

16

 

Baillie Gifford Long Term Global Growth Fund – $50,001-$100,000

 

$50,001-$100,000

 


20


Baillie Gifford Funds – Statement of Additional Information

Name and
Year of
Birth(1)​
  Position(s)
Held with
Trust
  Length of
Time
Served as
Trustee
  Principal
Occupation and
Other
Directorships
Held During
Past 5 Years
  Considerations relevant to
appointment as Trustee
(see also "Trustees and Trust
Officers–Trustee Appointments"
above)
  Number of
Portfolios
in Fund
Complex(2)
​
overseen
by Trustee
  Dollar range(3)​ of Shares
held in each Fund (USD)
  Aggregate
Dollar Range(3)​
of Shares held
in Fund
Complex(2)​
(USD)
 
John Kavanaugh
1962
 

Trustee

 

Since 2023

 

Retired. Formerly: Partner, Ernst and Young, LLP (public accounting).

 

John Kavanaugh is a CPA with over 37 years of public accounting experience with Ernst & Young (EY) providing audit, accounting and advisory services to a wide variety of clients in the financial services industry including registered investment companies and registered investment advisers. At the time of his retirement from EY in June of 2022, he was an assurance partner based in Dallas and the leader of EY's Financial Services Organization South Region Wealth and Asset Management Assurance Group. Mr. Kavanaugh also has previous experience on non-profit boards dedicated to assisting and mentoring financially constrained students through high school and college.

 

16

  $0   $0  
Robert E. Rigsby
1949
 

Trustee, Chair of the Audit Oversight Committee

 

Since 2014

 

Retired. Formerly: President & COO, Delivery Business at Dominion Energy, Inc. (electric and gas energy company).

 

Robert E. Rigsby has 30 years of broad professional experience in the energy industry. At the time of his retirement in 2002, he was President and COO of the Delivery Business at Dominion Energy, Inc. He previously held positions of Executive Vice President, Senior Vice President Finance & Controller, Vice President Human Resources, and Vice President Information Systems. Since his retirement, Mr. Rigsby has held leadership positions on the governing boards of two universities and several foundations.

 

16

  Baillie Gifford Developed EAFE All Cap Fund – $10,001-$50,000
Baillie Gifford EAFE Plus All Cap Fund – $10,001-$50,000
Baillie Gifford Emerging Markets Equities Fund – $10,001-$50,000
Baillie Gifford Global Alpha Equities Fund – $10,001-$50,000
Baillie Gifford International Alpha Fund – $10,001-$50,000
Baillie Gifford International Concentrated Growth Equities Fund – $10,001-$50,000
Baillie Gifford International Growth Fund – $10,001-$50,000
Baillie Gifford International Smaller Companies Fund – Under $10,000
Baillie Gifford Long Term Global Growth Fund – $50,001-$100,000
Baillie Gifford U.S. Equity Growth Fund – $10,001-$50,000
 

Over $100,000

 


21


Baillie Gifford Funds – Statement of Additional Information

Name and
Year of
Birth
(1)​

 

Position(s)
Held with
Trust

 

Length of
Time
Served as
Trustee

 

Principal
Occupation and
Other
Directorships
Held During
Past 5 Years

  Considerations relevant to
appointment as Trustee
(see also "
Trustees and Trust
Officers–Trustee Appointments"
above)
 

Number of
Portfolios
in Fund
Complex
(2)​
overseen
by Trustee

 

Dollar range(3)​ of Shares
held in each Fund (USD)

 

Aggregate
Dollar Range
(3)​
of Shares held
in Fund
Complex
(2)​
(USD)

 

Donald P. Sullivan Jr.
1954

 

Trustee

 

Since 2020

 

Retired. Formerly: Senior Vice President, Agency Distribution, Guardian Life Insurance (financial services).

 

Donald P. Sullivan Jr. has over 38 years of professional experience in the banking, securities, and financial services industries. At the time of his retirement in 2015, he was Senior Vice President of Agency Distribution at Guardian Life Insurance Company of America responsible for the growth and development of the National Career Agency Distribution Network. He previously served as President of Park Avenue Securities, Guardian's broker-dealer and registered investment adviser, overseeing product, compliance, operations, and strategy, as well as internal and external relationships.

 

16

 

Baillie Gifford International Concentrated Growth Equities Fund –
$10,001-$50,000
Baillie Gifford U.S. Equity Growth Fund –
$10,001-$50,000

 

$10,001-$50,000

 

 Interested Trustee (as defined in the 1940 Act)(4)​    

             

David W. Salter
1975

 

Trustee, Chair of the Board. Formerly, Vice President.

 

Since 2016

 

Partner, Baillie Gifford & Co (parent of investment adviser); CEO & former Chairman, Baillie Gifford Funds Services LLC (broker-dealer).

 

David Salter has over 23 years of professional experience in the investment management and financial services industries. As current CEO and former Chairman of Baillie Gifford Funds Services LLC and a Partner of the Manager's parent firm, Baillie Gifford & Co, Mr. Salter is also involved in the oversight of products offered by Baillie Gifford Funds Services LLC and oversight of the operations of the Manager.

 

16

 

None

 

None

 

(1)​  The address of each Trustee is c/o Baillie Gifford Oversees Limited, 780 Third Avenue, 43rd​ Floor, New York, NY 10017.

(2)​  The "Fund Complex" includes all Funds and Baillie Gifford International All Cap Fund which is not offered through this Prospectus.

(3)  ​Other than for John Kavanaugh, who began serving as an Independent Trustee as of October 1, 2023, values given are as of December 31, 2022. For John Kavanaugh, values given are as of October 1, 2023.

(4)​  Previous positions during the past five years with Baillie Gifford & Co, the Manager and Baillie Gifford Group are omitted if not materially different from the positions listed.

Five of the Trustees are not "interested persons" (as that term is defined in the 1940 Act) of the Trust ("Independent Trustees"). One Trustee, who serves as Chair of the Board, is an "interested person" of the Trust by reason of his affiliation with the Manager and his role as an officer of the Trust. The Trust does not have a lead independent trustee. The Board reviews its leadership structure periodically and believes that its structure is appropriate to enable the Board to oversee the Funds, after taking into account the characteristics of the Funds and their investment strategies and policies. For a discussion of the Board's role in risk oversight of the Funds, please see "Manager—Oversight by the Board" below.

A Board member may serve as a member of the Board until December 31 in the earlier of (i) their 15th year of service as a Board member, and (ii) the year of their 75th birthday. The Chair of the Board and the officers of the Trust, including the President of the Trust, are elected annually by the Board.

To the Trust's knowledge, as of December 31, 2022, none of the Independent Trustees or their immediate family members owned securities in the Manager or Baillie Gifford Funds Services LLC (the "Distributor" or "BGFS"), nor did they own securities in any entity directly or indirectly controlling, controlled by or under common control with the Manager or the Distributor.

Trustee Meetings

The Board meets periodically throughout the year to oversee the Trust's activities, review contractual arrangements with certain service providers, monitor compliance with regulatory requirements, and, through its Performance Committee, review performance.


22


Baillie Gifford Funds – Statement of Additional Information

Committees

The Board has four standing committees, as follows:

Committee

 

Functions

 

Membership

 

Chair

  Meetings during
last fiscal year(1)​
 

Audit Oversight Committee

 

Oversees the Trust's accounting and financial reporting policies and practices, its internal controls, and the quality and objectivity of the Trust's financial statements. Acts as liaison between the Trust's independent registered public accounting firm and the Board.

 

Independent Trustees only

 

Mr. Rigsby

 

4

 

Nominating and Governance Committee

 

Identifies, evaluates and recommends candidates to serve as Independent Trustees(2)​ and reviews the composition of the Board. Reviews and recommends Independent Trustee compensation.

 

Independent Trustees only

 

Mr. Chin

 

3

 

Performance Committee

 

Enhances the communication between the Manager and the Independent Trustees regarding Fund performance. Discusses Fund performance matters relating to the most recent quarter and for such other purposes as the Performance Committee may determine.

 

All Trustees

 

No chair

 

4

 

(1)​  Information is provided for the fiscal year ended December 31, 2022.

(2)​  The Nominating and Governance Committee will consider nominees recommended by shareholders. For a description of the procedures to be followed by security holders to submit recommendations, see "Trustees and Trust Officers—Trustee Nominations by Shareholders" above.

Trustee Compensation

The following tables set forth a summary of the compensation received by each Independent Trustee for services rendered as a Trustee and, if applicable, committee chair, for the fiscal year ended December 31, 2022. The Trust pays no compensation to its officers and interested Trustee. For the fiscal year ended December 31, 2022 each Independent Trustee received a retainer fee of $136,000. The chairs of the Audit Oversight Committee and the Nominating and Governance Committee received additional compensation of $12,000 and $4,500, respectively.

Aggregate Compensation from each Fund

  Howard W. Chin,
Trustee and Chair
of the Nominating
and Governance
Committee
  Pamela M. J.
Cox,
Trustee
  Donald P.
Sullivan Jr.,
Trustee
  Robert E. Rigsby,
Trustee and Chair
of the Audit
Oversight
Committee
 

Baillie Gifford China A Shares Growth Fund

 

$

15.28

   

$

14.80

   

$

14.79

   

$

16.10

   

Baillie Gifford China Equities Fund

 

$

23.97

   

$

23.21

   

$

23.20

   

$

25.25

   

Baillie Gifford Developed EAFE All Cap Fund

 

$

5,929.36

   

$

5,739.44

   

$

5,739.44

   

$

6,245.87

   

Baillie Gifford EAFE Plus All Cap Fund

 

$

4,835.60

   

$

4,680.72

   

$

4,680.72

   

$

5,093.73

   

Baillie Gifford Emerging Markets Equities Fund

 

$

50,431.40

   

$

48,816.14

   

$

48,816.16

   

$

53,123.48

   

Baillie Gifford Emerging Markets ex China Fund

 

$

8.26

   

$

7.99

   

$

8.00

   

$

8.70

   

Baillie Gifford Global Alpha Equities Fund

 

$

11,160.50

   

$

10,803.05

   

$

10,803.04

   

$

11,756.26

   

Baillie Gifford Health Innovation Equities Fund

 

$

108.57

   

$

105.08

   

$

105.09

   

$

114.35

   

Baillie Gifford International Alpha Fund

 

$

26,677.36

   

$

25,822.92

   

$

25,822.92

   

$

28,101.42

   

Baillie Gifford International Concentrated Growth Equities Fund

 

$

848.62

   

$

821.44

   

$

821.44

   

$

893.92

   

Baillie Gifford International Growth Fund

 

$

28,356.02

   

$

27,447.83

   

$

27,447.83

   

$

29,869.69

   

Baillie Gifford International Smaller Companies Fund

 

$

392.81

   

$

380.24

   

$

380.24

   

$

413.77

   

Baillie Gifford Long Term Global Growth Fund

 

$

6,920.05

   

$

6,698.41

   

$

6,698.41

   

$

7,289.45

   

Baillie Gifford U.S. Discovery Fund

 

$

28.33

   

$

27.43

   

$

27.43

   

$

29.85

   

Baillie Gifford U.S. Equity Growth Fund

 

$

466.02

   

$

451.10

   

$

451.11

   

$

490.91

   

Total Compensation from all Funds of the Trust(1)(2)(3)​

 

$

140,500.00

   

$

136,000.00

   

$

136,000.00

   

$

148,000.00

   

(1)​  All Trustees receive reimbursements for reasonable expenses related to their attendance at the meetings of the Board or committees, which are not included in the amounts shown. The amounts shown indicate the aggregate compensation paid to the Trustees for their service on the Board of the Trust and its series. During the 2022 fiscal year, no Trustee accrued pension or retirement benefits as part of the Trust's expenses, and no Trustee is expected to receive annual benefits upon retirement.

(2)  ​This total includes compensation from Baillie Gifford International All Cap Fund, the shares of which are not registered under the Securities Act of 1933 and are not offered through the Prospectus and this SAI. The total also includes compensation from Baillie Gifford Multi Asset Fund, the shares of which are not offered through the Prospectus and this SAI and which was terminated as a series of the Trust on September 21, 2022, compensation from Baillie Gifford Positive Change Equities Fund, which was reorganized into Vanguard Baillie Gifford Global Positive Impact Stock Fund on July 18, 2022 and terminated as a series of the Trust on September 21, 2022, and compensation from Baillie Gifford Global Stewardship Equities Fund which was terminated as a series of Trust on March 16, 2023.

(3)​  John Kavanaugh began serving as an Independent Trustee of the Trust, effective October 1, 2023. As such, he received no compensation for services rendered as a Trustee for the fiscal year ended December 31, 2022.


23


Baillie Gifford Funds – Statement of Additional Information

Trust Officers

The following table sets out the officers of the Trust, their principal occupations during the last five years, and certain other information.

Name and Year of
Birth(1)​
  Position(s) Held with
Trust
  Length of
Time Served(2)​
 

Principal Occupation During Past 5 Years(3)​

 

Officers (other than officers who are also Trustees)

Andrew Telfer
1967
 

Vice President

 

Since 2008

 

Managing Partner, Baillie Gifford & Co

 
Michael Stirling-Aird
1977
 

President

 

Since 2012

 

Partner; Baillie Gifford & Co

 
Julie Paul
1975
 

Vice President

 

Since 2012

 

Manager, North American Funds Operations Department, Baillie Gifford & Co

 
Tim Campbell
1975
 

Vice President

 

Since 2014

 

Partner, Baillie Gifford & Co; Manager, Baillie Gifford International LLC with oversight of marketing performed in North America

 
Lindsay Cockburn
1978
 

Treasurer

 

Since 2015

 

Manager, North American Funds Operations Department, Baillie Gifford & Co

 
Suzanne Quinn
1979
 

Chief Compliance Officer and AML Compliance Officer

 

Since 2018

 

Manager, Compliance Department, Baillie Gifford & Co

 
Neil Riddell
1988
 

Chief Risk Officer

 

Since 2021

 

Head of Group Risk, Baillie Gifford & Co

 
Gareth Griffiths
1973
 

Secretary and Chief Legal Officer

 

Secretary since 2015; Chief Legal Officer since 2017

 

Senior Legal Counsel for Baillie Gifford & Co

 
Lesley-Anne Archibald
1988
 

Vice President

 

Since 2017

 

Manager, North American Funds Operations Department, Baillie Gifford & Co

 
Kelly Cameron
1989
 

Vice President

 

Since 2020

 

Client Service Director, Baillie Gifford Overseas Limited

 

(1)​  The address of each officer of the Trust is c/o Baillie Gifford Funds, 780 Third Avenue, 43rd Floor, New York, NY 10017.

(2)​  The officers of the Trust are elected annually by the Board.

(3)​  Previous positions during the past five years with Baillie Gifford & Co, the Manager and Baillie Gifford Group are omitted if not materially different from the positions listed.

Trust Officer Compensation

The Trust currently pays no compensation to officers of the Trust.

Board Member and Trust Officer Liability

The Declaration of Trust provides that the Board members will not be liable for errors of judgment or mistakes of fact or law. However, nothing in the Declaration of Trust protects a Board member against any liability to which the Board member would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

The Board members and officers of the Trust are indemnified by the Trust for any and all liabilities and expenses actually and reasonably incurred in any proceeding brought or threatened against a Board member or officer by reason of any alleged act or omission as Board member or officer, unless such person did not act in good faith in the reasonable belief that such action was in the best interests of the Trust, under the Declaration of the Trust and the Bylaws of the Trust. No officer or Board member may be indemnified against any liability to the Trust or the Trust's shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

Investment in the Funds by Trust, Manager and Distributor Personnel

The Trust, the Manager and the Distributor have each adopted a code of ethics pursuant to Rule 17j-1 of the 1940 Act. This code of ethics permits personnel of the Trust, the Manager and the Distributor to invest in securities, including securities that may be purchased or held by the Funds, subject to restrictions.


24


Baillie Gifford Funds – Statement of Additional Information

Manager

The Manager is a wholly-owned subsidiary of Baillie Gifford & Co, which is generally engaged in the business of investment management. Both the Manager and Baillie Gifford & Co are authorized and regulated in the U.K. by the Financial Conduct Authority. The Manager and its affiliates are referred to herein as the "Baillie Gifford Group."

Oversight by the Board

The Board oversees the Manager, including by overseeing the following activities of the Manager:

—  Risk Management. As part of this process, the Board receives a report from, and meets periodically with, the Trust's chief risk officer. The Board and the Performance Committee also meet periodically with representatives of the Manager to receive reports regarding the management of the Funds, including their investment risks.

—  Compliance with Relevant Laws. To assist this process, the Board meets periodically with the Funds' chief compliance officer and receives reports regarding the compliance of the Funds and the Manager with the federal securities laws and the Fund's own compliance policies and procedures.

—  Financial Accounting and Reporting. The Board, either itself or through its committees, meets periodically with officers of the Trust and representatives from the Manager and the auditor of the Funds, to review and consider the financial accounting and reporting of the Funds.

—  All Management activities. In the course of providing oversight, the Board meets periodically with officers of the Trust and representatives from the Manager, and receives a broad range of reports on the Funds' activities, including regarding each Fund's investment portfolio.

—  Appointment of the Manager. The Board also reviews the appointment of the Manager at least annually.

Management Services

The Manager serves as the investment manager of the Funds under the Second Amended and Restated Investment Advisory Agreement dated June 18, 2021, as amended from time to time (the "Advisory Agreement").

Responsibilities

Under the Advisory Agreement, the Manager manages the investment and reinvestment of the assets of each Fund and generally administers its affairs, subject to oversight by the Board as described above. The Manager also furnishes, at its own expense, all necessary office space, facilities and equipment, services of executive and other personnel of the Funds and certain administrative services.

Investment Advisory Fee

For these services, the Advisory Agreement provides that each Fund pays the Manager an investment advisory fee. This fee is based on a percentage of the Fund's average daily net assets and is paid quarterly.

The following table sets out the investment advisory fees paid for each of the Funds during the last three years:

   

Investment Advisory Fees Paid (USD)

 

Fund

  Year ending
December 31,
2020
  Year ending
December 31,
2021
  Year ending
December 31,
2022
 
Baillie Gifford
China A Shares
Growth Fund
   

7,577

     

10,772

     

8,152

   
Baillie Gifford
China Equities
Fund(1)​
   

     

3,920

     

12,620

   
Baillie Gifford
Developed EAFE
All Cap Fund
   

1,894,638

     

2,319,325

     

2,025,404

   
Baillie Gifford
EAFE Plus
All Cap Fund
   

1,835,403

     

2,363,583

     

1,650,683

   
Baillie Gifford
Emerging Markets
Equities Fund
   

22,832,300

     

34,612,885

     

25,895,390

   
Baillie Gifford
Emerging Markets
ex China Fund(2)​
   

     

45

     

4,443

   
Baillie Gifford
Global Alpha
Equities Fund
   

4,471,121

     

6,064,269

     

4,378,443

   
Baillie Gifford
Health Innovation
Equities Fund(2)​
   

     

270

     

29,521

   
Baillie Gifford
International
Alpha Fund
   

10,409,554

     

13,737,213

     

9,176,421

   
Baillie Gifford
International
Concentrated
Growth Equities
Fund
   

508,776

     

521,126

     

341,874

   
Baillie Gifford
International
Growth Fund
   

11,625,310

     

14,048,723

     

9,364,770

   
Baillie Gifford
International
Smaller
Companies Fund
   

8,040

     

148,451

     

220,534

   
Baillie Gifford
Long Term Global
Growth Fund
   

2,233,290

     

4,879,136

     

3,173,803

   
Baillie Gifford
U.S. Discovery
Fund(3)​
   

     

4,793

     

13,385

   
Baillie Gifford U.S.
Equity Growth
Fund
   

150,240

     

479,310

     

160,987

   

(1)​  Baillie Gifford China Equities Fund commenced investment operations on July 7, 2021, and therefore did not pay any advisory fees for any years prior to 2021.

(2)​  Baillie Gifford Emerging Markets ex China Fund and Baillie Gifford Health Innovation Equities Fund each commenced investment operations on December 28, 2021, and therefore did not pay any advisory fees for any years prior to 2021.

(3)​  Baillie Gifford U.S. Discovery Fund commenced investment operations on May 5, 2021, and therefore did not pay any advisory fees for any years prior to 2021.


25


Baillie Gifford Funds – Statement of Additional Information

The advisory fee paid by each Fund under the Advisory Agreement is calculated and accrued daily on the basis of the annual rate noted below and expressed as a percentage of that Fund's average daily net assets:

Fund

  Average Daily Net Assets
of the Fund (billions)
  Annual Advisory
Fee Rate at Each
Asset Level
(percentage of the
Fund's average
daily net assets)
 
Baillie Gifford
China A Shares
Growth Fund
  $0 - $2
>$2 - $5
Above $5
  0.55%
0.51%
0.49%
 
Baillie Gifford
China Equities
Fund
  $0 - $2
>$2 - $5
Above $5
  0.55%
0.51%
0.49%
 
Baillie Gifford
Developed EAFE
All Cap Fund
  $0 - $2
>$2 - $5
Above $5
  0.35%
0.31%
0.29%
 
Baillie Gifford
EAFE Plus
All Cap Fund
  $0 - $2
>$2 - $5
Above $5
  0.35%
0.31%
0.29%
 
Baillie Gifford
Emerging Markets
Equities Fund
  $0 - $2
>$2 - $5
Above $5
  0.55%
0.51%
0.49%
 
Baillie Gifford
Emerging Markets
ex China Fund
  $0 - $2
>$2 - $5
Above $5
  0.55%
0.51%
0.49%
 
Baillie Gifford
Global Alpha
Equities Fund
  $0 - $2
>$2 - $5
Above $5
  0.40%
0.36%
0.34%
 
Baillie Gifford
Health Innovation
Equities Fund
  $0 - $2
>$2 - $5
Above $5
  0.33%
0.29%
0.27%
 
Baillie Gifford
International Alpha
Fund
  $0 - $2
>$2 - $5
Above $5
  0.35%
0.31%
0.29%
 
Baillie Gifford
International
Concentrated Growth
Equities Fund
  $0 -$2
>$2 -$5
Above $5
  0.40%
0.36%
0.34%
 
Baillie Gifford
International
Growth Fund
  $0 - $2
>$2 - $5
Above $5
  0.35%
0.31%
0.29%
 
Baillie Gifford
International Smaller
Companies Fund
 

All assets

 

0.58%

 
Baillie Gifford
Long Term Global
Growth Fund
  $0 - $2
>$2 - $5
Above $5
  0.45%
0.41%
0.39%
 
Baillie Gifford U.S.
Discovery Fund
 

All assets

 

0.50%

 
Baillie Gifford U.S.
Equity Growth Fund
  $0 - $2
>$2 - $5
Above $5
  0.33%
0.29%
0.27%
 

Investment Advisory Fee Waiver

In order to limit the expenses of Baillie Gifford China A Shares Growth Fund, Baillie Gifford China Equities Fund, Baillie Gifford Emerging Markets ex China Fund, Baillie Gifford Health Innovation Equities Fund, Baillie Gifford International Concentrated Growth Equities Fund, Baillie Gifford International

Smaller Companies Fund, Baillie Gifford U.S. Discovery Fund, and Baillie Gifford U.S. Equity Growth Fund, the Manager has contractually agreed to waive its fees and/or bear other expenses of each Fund to the extent that the annual expenses (excluding taxes, sub-accounting expenses, and extraordinary expenses) would exceed a certain annual rate of each Fund's average daily net assets. These waivers are described in the Prospectus under "Fund Management."

How to Change the Investment Advisory Agreement

The Advisory Agreement may be amended in a manner consistent with the 1940 Act. Amendments to the Advisory Agreement will require shareholder approval, unless (a) the amendments do not increase the compensation of the Manager or otherwise fundamentally alter the relationship of the Trust with the Manager and (b) the amendments are approved by the requisite majority of the Trustees who are not parties to the agreement or interested persons (as defined in the 1940 Act) of any such party.

Term of Manager's Appointment

The Advisory Agreement will continue in effect for two years from its date of execution. After this two year period, it will continue if its continuance is approved at least annually by:

—  the Board or by vote of a majority of the outstanding voting securities of the relevant Fund; and

—  vote of a majority of the Trustees who are not "interested persons" of the Trust, as that term is defined in the 1940 Act, cast in person at a meeting called for the purpose of voting on such approval.

The Advisory Agreement may be terminated without penalty by:

—  vote of the Board or by vote of a majority of the outstanding voting securities of the relevant Fund, upon sixty days' written notice; or

—  the Manager upon sixty days' written notice.

The Advisory Agreement also terminates automatically in the event of its assignment.

Manager Liability

The Advisory Agreement provides that the Manager shall not be subject to any liability in connection with the performance of its services thereunder in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties.

Other Clients

The Manager acts as investment adviser to numerous other corporate and fiduciary clients. Certain officers and the interested Trustee of the Trust also serve as officers, directors and Trustees of other investment companies and clients advised by the Manager. These other investment companies and clients sometimes invest in securities in which the Funds also invest. If a Fund and such other investment companies or clients desire to buy or sell the same portfolio securities at the same time, purchases and sales may be allocated, to the extent practicable, on a pro rata basis in proportion to the amounts desired to be purchased or sold for each. It is recognized that in some cases


26


Baillie Gifford Funds – Statement of Additional Information

the practices described in this paragraph could have a detrimental effect on the price or amount of the securities which a Fund purchases or sells. In other cases, however, it is believed that these practices may benefit the Funds. It is the opinion of the Board that the desirability of retaining the Manager as adviser for the Funds outweighs the disadvantages, if any, which might result from these practices.

Shareholder Services

Responsibilities

Pursuant to a shareholder servicing agreement, the Manager furnishes certain services to shareholders of Class 2, Class 3, Class 4 and Class 5 of the Funds. Prior to May 1, 2017, such services were also furnished to shareholders of Class 1 of the Funds. Class 1 shares of the Funds are no longer offered under the Prospectus or this SAI.

Fee

For these services, the shareholder servicing agreement provides that each share Class receiving the services pays the Manager a shareholder servicing fee. This fee is based on a fixed percentage of the Fund's average daily net assets and is paid quarterly.

The following table sets out the shareholder servicing fees paid for each of the Funds which have received these services during the last three years:

    Shareholder Servicing Fees Paid
(USD)
 

Fund

  Year ending
December 31,
2020
  Year ending
December 31,
2021
  Year ending
December 31,
2022
 
Baillie Gifford
China A Shares Growth
Fund(1)​
   

     

     

   
Baillie Gifford China
Equities Fund(1)​
   

     

     

   
Baillie Gifford Developed
EAFE All Cap Fund
   

463,426

     

394,019

     

317,241

   
Baillie Gifford EAFE Plus
All Cap Fund
   

560,909

     

613,154

     

437,712

   
Baillie Gifford Emerging
Markets Equities Fund
   

762,491

     

1,026,454

     

727,062

   
Baillie Gifford Emerging
Markets ex China Fund(1)​
   

     

     

   
Baillie Gifford Global
Alpha Equities Fund
   

1,022,167

     

1,093,369

     

649,227

   
Baillie Gifford Health
Innovation Equities Fund(1)​
   

     

     

   
Baillie Gifford International
Alpha Fund
   

1,942,132

     

2,045,945

     

1,401,876

   
Baillie Gifford International
Concentrated Growth
Equities Fund(1)​
   

     

     

   
Baillie Gifford International
Growth Fund
   

2,430,793

     

2,441,116

     

1,780,861

   
Baillie Gifford International
Smaller Companies Fund(1)​
   

     

     

   
Baillie Gifford Long Term
Global Growth Fund
   

209,443

     

241,541

     

151,980

   

      

    Shareholder Servicing Fees Paid
(USD)
 

Fund

  Year ending
December 31,
2020
  Year ending
December 31,
2021
  Year ending
December 31,
2022
 
Baillie Gifford U.S.
Discovery Fund(1)​
   

     

     

   
Baillie Gifford U.S.
Equity Growth Fund(1)​
   

     

     

   

      

(1)​  Baillie Gifford China A Shares Growth Fund, Baillie Gifford China Equities Fund, Baillie Gifford Emerging Markets ex China Fund, Baillie Gifford Health Innovation Equities Fund, Baillie Gifford International Concentrated Growth Equities Fund, Baillie Gifford International Smaller Companies Fund, Baillie Gifford U.S. Discovery Fund, and Baillie Gifford U.S. Equity Growth Fund do not offer any share classes that are subject to shareholder servicing fees. These Funds have consequently not paid any shareholder servicing fees during any completed fiscal year of the Trust.

Administration and Supervisory Services

Responsibilities

Pursuant to an administration and supervisory agreement, the Manager is responsible for furnishing certain administration services to Institutional Class and Class K shareholders as well as coordinating, overseeing and supporting services provided to Institutional Class and Class K shareholders by third parties.

Fee

For these services, the administration and supervisory agreement provides that Class K and Institutional Class each pays the Manager an administration and supervisory fee. This fee is based on a fixed percentage of the Fund's average daily net assets and is paid quarterly.

The following table sets out the administration and supervisory fees paid by each of the Funds during the last three years:

    Administration and Supervisory
Fees Paid
(USD)
 

Fund

  Year ending
December 31,
2020
  Year ending
December 31,
2021
  Year ending
December 31,
2022
 
Baillie Gifford China A
Shares Growth Fund
   

2,342

     

3,330

     

2,520

   
Baillie Gifford China
Equities Fund(1)​
   

     

1,211

     

3,901

   
Baillie Gifford Developed
EAFE All Cap Fund
   

396,084

     

545,539

     

581,207

   
Baillie Gifford EAFE Plus
All Cap Fund
   

292,896

     

407,985

     

259,805

   
Baillie Gifford Emerging
Markets Equities Fund
   

4,064,050

     

7,078,263

     

5,332,071

   
Baillie Gifford Emerging
Markets ex China Fund(2)​
   

     

14

     

1,374

   
Baillie Gifford Global
Alpha Equities Fund
   

272,426

     

686,462

     

708,663

   
Baillie Gifford Health
Innovation Equities Fund(2)​
   

     

140

     

15,207

   
Baillie Gifford International
Alpha Fund
   

1,885,293

     

3,337,202

     

2,172,766

   

      


27


Baillie Gifford Funds – Statement of Additional Information

    Administration and Supervisory
Fees Paid
(USD)
 

Fund

  Year ending
December 31,
2020
  Year ending
December 31,
2021
  Year ending
December 31,
2022
 
Baillie Gifford International
Concentrated Growth
Equities Fund
   

216,230

     

221,478

     

145,296

   
Baillie Gifford International
Growth Fund
   

251,348

     

869,692

     

519,310

   
Baillie Gifford International
Smaller Companies Fund
   

2,356

     

43,511

     

64,639

   
Baillie Gifford Long Term
Global Growth Fund
   

518,593

     

1,436,901

     

983,295

   
Baillie Gifford U.S.
Discovery Fund(3)​
   

     

1,630

     

4,551

   
Baillie Gifford U.S. Equity
Growth Fund
   

77,396

     

246,917

     

82,933

   

      

(1)  ​Baillie Gifford China Equities Fund commenced investment operations on July 7, 2021, and therefore did not pay any administration and supervisory fees for any years prior to 2021.

(2)  ​Baillie Gifford Emerging Markets ex China Fund and Baillie Gifford Health Innovation Equities Fund each commenced investment operations on December 28, 2021, and therefore did not pay any administration and supervisory fees for any years prior to 2021.

(3)  ​Baillie Gifford U.S. Discovery Fund commenced investment operations on May 5, 2021, and therefore did not pay any administration and supervisory fees for any years prior to 2021.

Investment Decisions by Portfolio Managers

Investment decisions made by the Manager for a Fund are made by teams of portfolio managers organized for that purpose.

Portfolio Manager Conflicts of Interest

In addition to managing the Funds, individual portfolio managers are commonly responsible for managing other registered investment companies, other pooled investment vehicles and/or other accounts. These other types of accounts may have similar investment strategies to the Funds.

For a description of potential conflicts of interest that may arise in connection with the portfolio managers' management of the Funds and the portfolio managers' management of other types of accounts please see "Principal Investment Risks—Conflicts of Interest Risk" in the Prospectus.

Other Accounts

The following table shows information regarding other accounts managed by the portfolio managers. The information is provided as of December 31, 2022, except where otherwise noted. As of December 31, 2022, no portfolio manager to a Fund owned beneficially any equity securities of such Fund.

            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Baillie Gifford China A Shares Growth Fund

 

Sophie Earnshaw

 
Registered
Investment
Companies
   

8

     

5,105

     

     

   
Other Pooled
Investment
Vehicles
   

11

     

2,414

     

     

   

Other Accounts

   

44

     

15,721

     

3

     

2,820

   

John MacDougall

 
Registered
Investment
Companies
   

1

     

519

     

     

   
Other Pooled
Investment
Vehicles
   

8

     

6,019

     

     

   

Other Accounts

   

84

     

27,834

     

3

     

789

   

Baillie Gifford China Equities Fund

 

Sophie Earnshaw

 
Registered
Investment
Companies
   

8

     

5,104

     

     

   
Other Pooled
Investment
Vehicles
   

11

     

2,414

     

     

   

Other Accounts

   

44

     

15,721

     

3

     

2,820

   

Mike Gush

 
Registered
Investment
Companies
   

5

     

5,057

     

1

     

170

   
Other Pooled
Investment
Vehicles
   

13

     

3,725

     

1

     

107

   

Other Accounts

   

16

     

6,273

     

1

     

505

   

Roderick Snell

 
Registered
Investment
Companies
   

1

     

462

     

     

   
Other Pooled
Investment
Vehicles
   

9

     

5,827

     

     

   

Other Accounts

   

8

     

7,011

     

1

     

2,480

   


28


Baillie Gifford Funds – Statement of Additional Information

            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Baillie Gifford Developed EAFE All Cap Fund

 

Iain Campbell

 
Registered
Investment
Companies
   

5

     

4,076

     

     

   
Other Pooled
Investment
Vehicles
   

4

     

433

     

     

   

Other Accounts

   

37

     

8,876

     

2

     

340

   

Sophie Earnshaw

 
Registered
Investment
Companies
   

8

     

4,542

     

     

   
Other Pooled
Investment
Vehicles
   

11

     

2,414

     

     

   

Other Accounts

   

44

     

15,721

     

3

     

2,820

   

Joe Faraday

 
Registered
Investment
Companies
   

5

     

4,076

     

     

   
Other Pooled
Investment
Vehicles
   

3

     

272

     

     

   

Other Accounts

   

35

     

8,806

     

2

     

340

   

Milena Mileva

 
Registered
Investment
Companies
   

5

     

4,076

     

     

   
Other Pooled
Investment
Vehicles
   

8

     

1,580

     

     

   

Other Accounts

   

41

     

10,459

     

2

     

340

   

Stephen Paice

 
Registered
Investment
Companies
   

5

     

4,076

     

     

   
Other Pooled
Investment
Vehicles
   

7

     

1,733

     

     

   

Other Accounts

   

37

     

8,991

     

2

     

340

   
            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Baillie Gifford EAFE Plus All Cap Fund

 

Iain Campbell

 
Registered
Investment
Companies
   

5

     

4,199

     

     

   
Other Pooled
Investment
Vehicles
   

4

     

433

     

     

   

Other Accounts

   

37

     

8,876

     

2

     

340

   

Sophie Earnshaw

 
Registered
Investment
Companies
   

8

     

4,665

     

     

   
Other Pooled
Investment
Vehicles
   

11

     

2,414

     

     

   

Other Accounts

   

44

     

15,721

     

3

     

2,820

   

Joe Faraday

 
Registered
Investment
Companies
   

5

     

4,199

     

     

   
Other Pooled
Investment
Vehicles
   

3

     

272

     

     

   

Other Accounts

   

35

     

8,806

     

2

     

340

   

Milena Mileva

 
Registered
Investment
Companies
   

5

     

4,199

     

     

   
Other Pooled
Investment
Vehicles
   

8

     

1,580

     

     

   

Other Accounts

   

41

     

10,459

     

2

     

340

   

Stephen Paice

 
Registered
Investment
Companies
   

5

     

4,199

     

     

   
Other Pooled
Investment
Vehicles
   

7

     

1,733

     

     

   

Other Accounts

   

37

     

8,991

     

2

     

340

   


29


Baillie Gifford Funds – Statement of Additional Information

            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Baillie Gifford Emerging Markets Equities Fund

 

Ben Durrant, as of January 31, 2023*

 
Registered
Investment
Companies
   

2

     

192

     

1

     

191

   
Other Pooled
Investment
Vehicles
   

8

     

6,425

     

1

     

121

   

Other Accounts

   

16

     

8,401

     

1

     

543

   

*  Ownership of Securities—As of January 31, 2023, Mr. Durrant did not beneficially own any shares of Baillie Gifford Emerging Markets Equities Fund.

Mike Gush

 
Registered
Investment
Companies
   

5

     

638

     

1

     

170

   
Other Pooled
Investment
Vehicles
   

13

     

3,725

     

1

     

107

   

Other Accounts

   

16

     

6,273

     

1

     

505

   

Andrew Stobart

 
Registered
Investment
Companies
   

6

     

4,734

     

1

     

170

   
Other Pooled
Investment
Vehicles
   

6

     

2,752

     

1

     

107

   

Other Accounts

   

48

     

15,423

     

4

     

1,945

   

Baillie Gifford Emerging Markets ex China Fund

 

Ben Durrant, as of January 31, 2023*

 
Registered
Investment
Companies
   

2

     

6,057

     

1

     

191

   
Other Pooled
Investment
Vehicles
   

8

     

6,452

     

1

     

121

   

Other Accounts

   

16

     

8,401

     

1

     

543

   

*  Ownership of Securities—As of January 31, 2023, Mr. Durrant did not beneficially own any shares of Baillie Gifford Emerging Markets ex China Fund.

            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Mike Gush

 
Registered
Investment
Companies
   

5

     

5,058

     

1

     

170

   
Other Pooled
Investment
Vehicles
   

13

     

3,725

     

1

     

107

   

Other Accounts

   

16

     

6,273

     

1

     

505

   

Andrew Stobart

 
Registered
Investment
Companies
   

6

     

9.154

     

1

     

170

   
Other Pooled
Investment
Vehicles
   

6

     

2,752

     

1

     

107

   

Other Accounts

   

48

     

15,423

     

4

     

1,945

   

Baillie Gifford Global Alpha Equities Fund

 

Spencer Adair

 
Registered
Investment
Companies
   

4

     

3,688

     

2

     

3,543

   
Other Pooled
Investment
Vehicles
   

17

     

14,599

     

3

     

259

   

Other Accounts

   

59

     

26,150

     

6

     

4,199

   

Malcolm MacColl

 
Registered
Investment
Companies
   

1

     

3,284

     

1

     

3,284

   
Other Pooled
Investment
Vehicles
   

16

     

14,555

     

3

     

259

   

Other Accounts

   

55

     

25,934

     

6

     

4,199

   

Helen Xiong

 
Registered
Investment
Companies
   

1

     

3,284

     

1

     

3,284

   
Other Pooled
Investment
Vehicles
   

15

     

11,370

     

3

     

259

   

Other Accounts

   

55

     

25,934

     

6

     

4,199

   


30


Baillie Gifford Funds – Statement of Additional Information

            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Baillie Gifford Health Innovation Equities Fund

 

Julia Angeles

 
Registered
Investment
Companies
   

4

     

31,949

     

2

     

28,653

   
Other Pooled
Investment
Vehicles
   

7

     

1,566

     

1

     

112

   

Other Accounts

   

36

     

11,608

     

     

   

Rose Nguyen

 
Registered
Investment
Companies
   

     

     

     

   
Other Pooled
Investment
Vehicles
   

2

     

358

     

     

   

Other Accounts

   

3

     

214

     

     

   

Marina Record

 
Registered
Investment
Companies
   

     

     

     

   
Other Pooled
Investment
Vehicles
   

2

     

358

     

     

   

Other Accounts

   

3

     

214

     

     

   

Baillie Gifford International Alpha Fund

 

Chris Davies

 
Registered
Investment
Companies
   

3

     

2,453

     

     

   
Other Pooled
Investment
Vehicles
   

5

     

2,108

     

     

   

Other Accounts

   

36

     

9,603

     

4

     

1,945

   

Jenny Davis

 
Registered
Investment
Companies
   

3

     

2,453

     

     

   
Other Pooled
Investment
Vehicles
   

1

     

647

     

     

   

Other Accounts

   

34

     

9,419

     

4

     

1,945

   
            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Donald Farquharson

 
Registered
Investment
Companies
   

3

     

2,453

     

     

   
Other Pooled
Investment
Vehicles
   

2

     

1,025

     

     

   

Other Accounts

   

39

     

11,939

     

5

     

2,188

   

Andrew Stobart

 
Registered
Investment
Companies
   

6

     

7,045

     

1

     

170

   
Other Pooled
Investment
Vehicles
   

6

     

2,752

     

1

     

107

   

Other Accounts

   

48

     

15,423

     

4

     

1,945

   

Steve Vaughan

 
Registered
Investment
Companies
   

6

     

2,959

     

1

     

302

   
Other Pooled
Investment
Vehicles
   

2

     

717

     

     

   

Other Accounts

   

35

     

9,470

     

4

     

1,945

   

Tom Walsh

 
Registered
Investment
Companies
   

3

     

2,453

     

     

   
Other Pooled
Investment
Vehicles
   

1

     

647

     

     

   

Other Accounts

   

34

     

9,419

     

4

     

1,945

   

Baillie Gifford International Concentrated Growth Equities Fund

 

Spencer Adair

 
Registered
Investment
Companies
   

4

     

4,665

     

2

     

3,543

   
Other Pooled
Investment
Vehicles
   

17

     

14,599

     

3

     

259

   

Other Accounts

   

59

     

26,150

     

6

     

4,199

   


31


Baillie Gifford Funds – Statement of Additional Information

            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Lawrence Burns

 
Registered
Investment
Companies
   

6

     

32,285

     

3

     

28,913

   
Other Pooled
Investment
Vehicles
   

7

     

16,805

     

1

     

112

   

Other Accounts

   

41

     

11,971

     

1

     

182

   

Paulina McPadden

 
Registered
Investment
Companies
   

2

     

336

     

1

     

260

   
Other Pooled
Investment
Vehicles
   

2

     

48

     

     

   

Other Accounts

   

4

     

216

     

     

   

Baillie Gifford International Growth Fund

 

Julia Angeles

 
Registered
Investment
Companies
   

4

     

29,374

     

2

     

28,653

   
Other Pooled
Investment
Vehicles
   

7

     

1,566

     

1

     

112

   

Other Accounts

   

36

     

11,608

     

     

   

Lawrence Burns

 
Registered
Investment
Companies
   

6

     

29,757

     

3

     

28,913

   
Other Pooled
Investment
Vehicles
   

7

     

16,805

     

1

     

112

   

Other Accounts

   

41

     

11,971

     

1

     

182

   

Thomas Coutts

 
Registered
Investment
Companies
   

3

     

29,353

     

2

     

28,653

   
Other Pooled
Investment
Vehicles
   

5

     

1,208

     

1

     

112

   

Other Accounts

   

33

     

11,394

     

     

   
            Where advisory fee is
based on account
performance:
 

Account Type

  Total
Accounts
  Total Assets
in Accounts
(US$M)
 

Accounts

  Assets in
Accounts
(US$M)
 

Brian Lum

 
Registered
Investment
Companies
   

6

     

29,858

     

3

     

28,955

   
Other Pooled
Investment
Vehicles
   

6

     

1,277

     

1

     

112

   

Other Accounts

   

34

     

11,445

     

     

   

Baillie Gifford International Smaller Companies Fund

 

Charlie Broughton

 
Registered
Investment
Companies
   

2

     

470

     

1

     

302

   
Other Pooled
Investment
Vehicles
   

2

     

245