To factor in volatile markets and increasing geopoliticial tensions, the new fund has a higher allocation to bonds and a lower level of equities.

Speaking at the launch event, attended by WealthBriefing, Steven Hay, co–manager of the Ballie Gifford Cautious Managed Fund and head of income research, said clients have been demanding less equity volatility, which the new fund aims to address. It has a 50 per cent exposure to equities, 45 per cent in bonds and 5 per cent in cash. This compares to the Baillie Gifford Managed Fund which has a base allocation of 75 per cent equities, 20 per cent bonds and 5 per cent cash.

Hay said it was a good time to launch the fund as other markets, notably emerging markets including China, outperformed US equities in 2025 – a trend he sees continuing in 2026.  

He is not alone in his views. A number of wealth managers have recently emphasised this. For example, Daniel Casali, chief investment strategist at UK wealth manager Evelyn Partners, drew attention recently to emerging markets outperforming developed markets in 2025, saying that they could do so again in 2026, supported by a weaker US dollar. See more here.

Early investors in Baillie Gifford’s fund are eligible for a discounted management fee. There is a 30 per cent saving on B shares for the first three years before normalising to a 0.4 per cent annual management fee.

“Our research has convinced us that there is demand for a less volatile managed option. It is the same team at the helm and the same successful process still offering the best of Baillie Gifford’s equity and bond ideas, but blended differently,” James Budden, head of global marketing added.