BAILLIE GIFFORD
FUNDS
Baillie Gifford Emerging Markets Equities Fund
BAILLIE GIFFORD
ETF TRUST
Baillie Gifford
Emerging Markets ETF
780 Third
Avenue
43rd Floor
New York, NY 10017
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
[ ], 2026
Dear Shareholders,
I am writing to ask for your
vote on an important matter that will affect your investments in Baillie Gifford Emerging Markets Equities Fund (the “EM Mutual
Fund”) and/or Baillie Gifford Emerging Markets ETF (the “EM ETF”), as applicable. Votes will be cast at separate virtual
shareholder meetings for each Fund, scheduled for [ ], 2026. Shareholders of each Fund will vote separately on each item proposed for
that Fund. Details about the meetings and the ways you can submit your vote are included in the enclosed proxy statement.
Each Fund’s investment
manager, Baillie Gifford Overseas Limited (“Baillie Gifford”), and the Board of Trustees (the “Board”) of each
Fund are recommending a vote FOR the proposal to reclassify each Fund from “diversified” to “non-diversified”
under the Investment Company Act of 1940, allowing Baillie Gifford greater flexibility in managing each Fund’s portfolio holdings.
Baillie Gifford and the Board believe
that enhancing Baillie Gifford’s flexibility to manage each Fund is in the best interests of each Fund because it allows Baillie
Gifford:
| 1) | to better pursue each Fund’s investment objective on behalf of the
Fund’s shareholders; and |
| 2) | to better actively manage positions held by each Fund that have large weightings
in its benchmark index according to Baillie Gifford’s relative risk expectations for these issuers. |
A summary of the Board’s considerations for approving the proposal
for each Fund, as well as other important information, is provided in the proxy statement. Please read the proxy statement and consider
it carefully before casting your voting instruction(s).
We appreciate your participation and prompt response to this important
matter and thank you for your continued support.
| |
Sincerely, |
| |
|
| |
Gareth
Griffiths |
| |
Gareth
Griffiths, Secretary |
| |
Baillie
Gifford Emerging Markets Equities Fund |
| |
Baillie
Gifford Emerging Markets ETF |
BAILLIE GIFFORD
FUNDS
Baillie Gifford Emerging Markets Equities Fund
BAILLIE GIFFORD
ETF TRUST
Baillie
Gifford Emerging Markets ETF
780 Third
Avenue
43rd Floor
New York, NY 10017
IMPORTANT
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD [ ], 2026
Separate Special Meetings for each of (1) the
Shareholders of Baillie Gifford Emerging Markets Equities Fund (the “EM Mutual Fund”), a series of Baillie Gifford Funds (“BGF”),
a Massachusetts business trust, and (2) the Shareholders of Baillie Gifford Emerging Markets ETF (the “EM ETF”) (each of EM
Mutual Fund and EM ETF, a “Fund” and collectively, the “Funds”), a series of Baillie Gifford ETF Trust (“ETF
Trust”) (each of BGF and ETF Trust, a “Trust” and collectively, the “Trusts”), a Massachusetts business
trust, will be held virtually on [ ], 2026, at [9:00 a.m.] Eastern Time and [9:30 a.m.] Eastern Time, respectively, (each, a “Meeting,”
and together, the “Meetings”) for the following purposes:
| ITEM 1. | To approve reclassifying the diversification status of each Fund under the Investment Company Act of 1940,
as amended, from “diversified” to “non-diversified”. |
| ITEM 2. |
To transact such other business as may properly come before each Meeting and any adjournment(s) or postponements thereof. |
THE BOARD OF TRUSTEES OF EACH TRUST UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR ITEM 1.
Only a Fund’s shareholders of record as
of [ ], 2026 (the “Record Date”) will be entitled to vote at its Meeting of Shareholders. Your vote is important. Whether
or not you expect to attend the Meetings, please follow the steps listed on the enclosed proxy card to vote.
| |
By
order of the Board of Trustees of the Trusts, |
| |
|
| |
|
| |
Gareth
Griffiths |
| |
Gareth
Griffiths, Secretary |
| |
Baillie
Gifford Emerging Markets Equities Fund |
| |
Baillie
Gifford Emerging Markets ETF |
[ ], 2026
NOTICE: YOUR VOTE IS IMPORTANT. PLEASE FILL IN, DATE, SIGN AND RETURN
THE ENCLOSED PROXY PROMPTLY WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETINGS. YOU MAY ALSO VOTE IF YOU ATTEND THE SPECIAL MEETINGS.
Proxy
Statement
[
], 2026
BAILLIE
GIFFORD FUNDS
Baillie
Gifford Emerging Markets Equities Fund
BAILLIE
GIFFORD ETF TRUST
Baillie
Gifford Emerging Markets ETF
780
Third Avenue
43rd
Floor
New
York, NY 10017
This Proxy Statement relates
to the proposals to reclassify the diversification status of Baillie Gifford Emerging Markets Equities Fund (the “EM Mutual Fund”),
a series of Baillie Gifford Funds (“BGF”), and Baillie Gifford Emerging Markets ETF (the “EM ETF”) (each of EM
Mutual Fund and EM ETF, a “Fund” and collectively, the “Funds”), a series of Baillie Gifford ETF Trust (“ETF
Trust”) (each of BGF and ETF Trust, a “Trust” and collectively, the “Trusts”), from “diversified”
to “non-diversified” under the Investment Company Act of 1940, as amended (the “1940 Act”) (each, a “Proposal”
and together, the “Proposals”).
This Proxy Statement is being
mailed to shareholders of each Fund on or about [ ], 2026.
All proxies solicited by the
Boards of Trustees of the Funds (the “Board” and each member a “Trustee” and collectively the “Trustees”)
that are properly executed and received by the Secretary of each Fund prior to the virtual Special Meeting of Shareholders of such Fund
to be held on [ ], 2026 (each, a “Meeting” and together, the “Meetings”), and not revoked, will be voted at the
Meetings.
For your vote to be counted
it must be received by Broadridge Investor Communication Solutions, Inc. (“Broadridge”) by [ ] Eastern Time on [ ].
This Proxy Statement is available
at www.proxyvote.com.
To attend and vote at the
Meetings, please register at [www.virtualshareholdermeeting.com/[ ]] for the EM Mutual Fund and/or [www.virtualshareholdermeeting.com/[
]] for the EM ETF.
The Meetings will be held
in a virtual format only. Shareholders are invited to attend the Meetings by means of a live webcast using the unique links provided above.
Shareholders will not be able to attend the Meetings in person and are encourage to access their Meeting(s) prior to the designated start
time. Online check-in will begin [15 minutes prior to the designated start time for each Meeting], to allow time for the check-in procedures.
This Proxy Statement explains
concisely what you should know before voting on a Fund’s proposed reclassification from a diversified fund to a non-diversified
fund. Please read it carefully and retain it for future reference.
If there is anything you do
not understand, please call the toll-free number, [ ], or contact your financial intermediary.
Instructions for Voting Proxies
The giving
of a proxy will not affect a shareholder’s right to vote at the meeting should the shareholder decide to attend a Meeting. To vote
by mail, please mark, sign, date and return the enclosed proxy card following the instructions printed on the card. Please refer to your
proxy card for instructions on voting by telephone or Internet.
What are shareholders being asked to vote on?
Baillie Gifford Overseas Limited
(“Baillie Gifford”), which serves as the Funds’ investment adviser, and the Board are recommending that shareholders
of each Fund approve the reclassification of the Fund’s diversification status from diversified to non-diversified. As a diversified
fund, each Fund is currently limited in the portion of portfolio investments that can be invested into issuers that constitute holdings
of greater than 5% of the Fund’s assets. If the reclassification is approved by a Fund’s shareholders, that Fund will not
be subject to these limitations, providing Baillie Gifford with greater flexibility to increase or decrease positions in individual issuers
according to its relative risk expectations for these issuers and to actively manage the Fund’s portfolio holdings. If shareholders
approve the reclassification of a Fund as a non-diversified fund, the Fund’s fundamental investment policies regarding diversification
of investments will be changed to reflect that the Fund is non-diversified. The Fund’s investment objective and other investment
policies will remain unchanged. A comparison of each Fund’s current disclosure of principal investment strategies and its expected
disclosure of principal investment strategies following the implementation of the Proposal (assuming shareholder approval) is set forth
below (deleted language is in bold strike-through text and new language is in bold underlined text):
| EM Mutual Fund Principal Investment Strategies Following the Reclassification |
|
The Fund seeks to meet its objective by investing
in a portfolio of common stocks and other equity securities of issuers located in countries of emerging and frontier markets.
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 represented
in the MSCI Emerging Markets Index. The countries represented in the MSCI Emerging Markets Index include markets that may be less sophisticated
than more developed markets in terms of participation by investors, analyst coverage, liquidity, and regulation. The Fund invests in equity
securities either directly or indirectly, such as through depositary receipts or participatory notes, and may invest in preferred stocks,
convertible securities, rights and warrants. The Fund is not constrained with respect to market capitalization and may participate in
initial public offerings (“IPOs”). In addition, investment is permitted in securities offerings that are not registered in
the U.S. The portfolio managers have flexibility to gain exposure to one or more emerging markets through investing in exchange traded
funds (“ETFs”) that track relevant equity indices.
The portfolio managers primarily employ a bottom-up
approach to stock selection, seeking to identify companies they believe have attractive long-term growth prospects, and select companies
without being constrained by the MSCI Emerging Markets benchmark. The portfolio managers may reference the benchmark to set limits on
the relative weighting of countries in the portfolio. The portfolio managers can also consider macro-economic
factors when identifying potential investments. The portfolio managers focus on company research and the long-term outlook of companies
and industries. Ideas can come from a wide variety of sources, including, but not limited to, research trips, company meetings, and relationships
with
|
industry thought leaders and academic institutions. Stock ideas are normally researched to assess a range of factors, including:
long-term growth potential, geographic and industry positioning, competitive advantage, management, financial strength and valuation.
Under normal circumstances, the intended outcome is a portfolio typically consisting of between 60 and 100 growth companies with the potential
to outperform the Fund’s benchmark over the long term. The process can result in significant exposure to a single issuer,
industry or sector or a single country or a small number of countries, which in recent periods has included China. The Fund expects
to invest significantly in Chinese companies including through China A shares, which are common stocks and other equity securities that
are listed or traded on a Chinese stock exchange and which are quoted in renminbi, the official currency of China. The Fund intends
to operate as a non-diversified fund, which means that it may invest a relatively large percentage of its assets in a small number of
issuers, industries, or sectors. The Fund aims to hold securities for long periods (typically at least 5 years), which generally
results in relatively low portfolio turnover and is in line with the portfolio managers’ long-term investment outlook. When assessing
a company’s long-term growth prospects, the portfolio managers seek to identify and to incorporate a range of factors that are material
to managing the Fund’s investment risks and maximizing capital appreciation. Such factors potentially include the environmental,
social, and/or governance characteristics of the company, such as stewardship, sustainable business practices, and/or corporate culture.
The Fund may invest without limitation in securities
quoted or denominated in currencies other than the U.S. dollar and may hold such currencies. The Fund does not expect to engage in currency
hedging and thus expects to be fully exposed to currency fluctuations relative to the U.S. dollar. |
| EM ETF Principal Investment Strategies Following the Reclassification |
|
The Fund is an actively managed ETF. The Fund
seeks to meet its objective by investing in a portfolio of common stocks and other equity securities of issuers located in countries of
emerging and frontier markets.
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 represented
in the MSCI Emerging Markets Index. The countries represented in the MSCI Emerging Markets Index include markets that may be less sophisticated
than more developed markets in terms of participation by investors, analyst coverage, liquidity, and regulation. The Fund invests in equity
securities either directly or indirectly, such as through depositary receipts or participatory notes, and may invest in preferred stocks,
convertible securities, rights and warrants. Under normal circumstances, the Fund is expected to invest to a significant extent (up to
70% of the Fund’s net assets) in American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”)
and Global Depositary Receipts (“GDRs”). The portfolio managers also have flexibility to implement the Fund’s investment
strategy through investing in active ETFs and ETFs that track relevant equity indices. The Fund is not constrained with respect to market
capitalization and may participate in initial public offerings (“IPOs”). In addition, investment is permitted in securities
offerings that are not registered in the U.S.
The portfolio managers primarily employ a
bottom-up approach to stock selection, seeking to identify companies they believe have attractive long-term growth prospects, and select
companies without being constrained by the MSCI Emerging Markets benchmark. The portfolio managers may reference the benchmark to set
limits on the relative weighting of countries in the portfolio. The portfolio managers can also consider macro-economic
factors when identifying potential investments. The portfolio managers focus on company research and the long-term outlook of companies
and industries. Ideas can come from a wide variety of sources, including, but not limited to, research trips, company meetings, and relationships
with
|
industry thought leaders and academic institutions. Stock ideas are normally researched to assess a range of factors, including:
long-term growth potential, geographic and industry positioning, competitive advantage, management, financial strength and valuation.
Under normal circumstances, the intended outcome is a portfolio typically consisting of between 60 and 100 growth companies with the potential
to outperform the Fund’s benchmark over the long term. The process can result in significant exposure to a single issuer,
industry or sector or a single country or a small number of countries. The Fund expects to invest significantly in Chinese companies
including through China A shares, which are common stocks and other equity securities that are listed or traded on a Chinese stock exchange
and which are quoted in renminbi, the official currency of China. The Fund intends to operate as a non-diversified fund, which means
that it may invest a relatively large percentage of its assets in a small number of issuers, industries, or sectors. The Fund
aims to hold securities for long periods (typically at least 5 years), which generally results in relatively low portfolio turnover and
is in line with the portfolio managers’ long-term investment outlook. When assessing a company’s long-term growth prospects,
the portfolio managers seek to identify and to incorporate a range of factors that are material to managing the Fund’s investment
risks and maximizing capital appreciation. Such factors potentially include the environmental, social, and/or governance characteristics
of the company, such as stewardship, sustainable business practices, and/or corporate culture.
The Fund may invest without limitation in securities
quoted or denominated in currencies other than the U.S. dollar and may hold such currencies. The Fund does not expect to engage in currency
hedging and thus expects to be fully exposed to currency fluctuations relative to the U.S. dollar. |
What is the difference between a diversified
fund and non-diversified fund?
Under Section 5(b) of the
1940 Act a fund must be classified as either diversified or non-diversified. The 1940 Act provides that a fund that is classified as diversified,
with respect to 75% of its total assets, may not invest in a security if, as a result of such investment, more than 5% of its total assets
(calculated at the time of purchase) would be invested in securities of any one issuer. Additionally, with respect to 75% of its total
assets, a diversified fund may not hold more than 10% of the outstanding voting securities of any one issuer. These restrictions do not
apply to U.S. government securities, securities of other investment companies, or cash and cash items (including receivables). A U.S.
government security is any security issued or guaranteed as to principal or interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the government of the United States pursuant to authority granted by the Congress of
the United States, or any certificate of deposit for any of the forgoing. The remaining 25% of a diversified fund’s total assets
are not subject to these limitations. In effect the aggregated total of single issuer positions of 5% or more cannot exceed 25%
of a fund’s total assets. The above limitations applicable to diversified funds apply at the time of a fund’s investment in
a security and, therefore, a fund is not required to sell a position in a security if the fund subsequently exceeds the diversification
limits as a result of market appreciation of such security. In these instances, however, a diversified fund is restricted from purchasing
any additional amount of such security – even if only in response to fund inflows – until the fund’s portfolio is in
compliance with the above diversification limits.
A non-diversified fund is
not subject to these limitations and may therefore hold a greater percentage of its assets in the securities of a single issuer or small
number of issuers. For example, a non-diversified fund may freely establish an overweight position in an issuer relative to the issuer’s
benchmark index weight as an expression of the portfolio managers’ confidence in their high-conviction ideas, whereas a diversified
fund may be constrained from doing the same by the diversification requirements if the issuer’s benchmark index weight is sufficiently
large. While a non-diversified fund is not subject to the diversification limitations under
the 1940 Act, it
is still subject to tax diversification requirements under the Internal Revenue Code of 1986 (the “Code”) (please see below
for more detail).
Why are shareholders being asked to approve
a change in the Funds’ diversification classifications?
Each Fund’s investment
objective is to seek capital appreciation. Each Fund seeks to meet its objective by investing in a portfolio of common stocks and other
equity securities of issuers located in countries of emerging and frontier markets. Under normal circumstances, each Fund invests at least
80% of its net assets (plus any borrowings for investment purposes) in equity securities of companies located in countries represented
in the MSCI Emerging Markets Index (the “Index”).
Over the past several years,
certain technology-related issuers in emerging markets have experienced significant increases in market capitalization. Consequently,
the Index has become much more concentrated at the individual issuer level, and a small number of issuers, most notably Taiwan Semiconductor
Manufacturing Co. (“TSMC”), dominate the Index. As of June 30, 2026, issuer weightings over 5%, in aggregate, comprised
31.78% of the Index’s total weight. Specifically, as of June 30, 2026, the weightings of the following issuers represented over
5% of the Index: TSMC (15.08%), Samsung Electronics Co., Ltd. (9.05%), and SK Hynix Inc. (7.65%). Although levels of concentration have
historically fluctuated in the Index, Baillie Gifford believes that this type of market concentration is likely to continue.
In order to meet the requirements
of each Fund’s current diversification status, Baillie Gifford is limited in its ability to manage each Fund’s current positions
in certain issuers. Similar to the Index, each Fund’s portfolio has gradually invested a greater percentage in a handful of its
largest holdings over time, concurrent with significant increases in the market capitalization of certain emerging-markets issuers. As
of June 30, 2026, issuer weightings over 5%, in aggregate, comprised 24.1% of the EM Mutual Fund’s total assets, and several of
the Fund’s other positions were approaching the 5% threshold and may exceed that threshold through ordinary market appreciation.
The Fund is not required to reduce its positions that exceed the 5% threshold as a result of market appreciation subsequent to the Fund’s
investment; however, in light of the Fund’s current aggregated total of single issuer positions of 5% or more, it must pause further
purchases of any holdings with 5% or greater weighting. In these instances, Baillie Gifford is limited in its ability to manage such larger
positions based on its current investment thesis or relative risk expectations for these issuers. Specifically, Baillie Gifford is currently
limited to only being able to reduce its more concentrated positions and, therefore, is unable to freely adjust these positions upward
or downward relative to the portfolio managers’ long-term outlook of an issuer’s fundamentals. In certain circumstances, the
portfolio managers have been required to limit or reduce exposure to high-conviction investments – or otherwise to adjust portfolio
weights – in order to maintain compliance with the 1940 Act, despite their continued confidence in the underlying investment thesis.
Such a situation puts the Funds in danger of underperforming their benchmarks (as well as any non-diversified competitor funds) in part
due to having a relative underweight to issuers in which the portfolio management team has high conviction and would potentially wish
to overweight. The Fund is actively managed and does not seek to track the holdings or issuer weightings of the Index and, therefore,
if the proposal is approved by the Fund’s shareholders, the Fund may freely hold overweight or underweight positions in specific
issuers relative to the Index based on Baillie Gifford’s long-term risk and return expectations for a particular issuer. The EM
ETF employs a substantially similar emerging markets investment strategy as the EM Mutual Fund and faces identical structural constraints
from its diversified classification. As of June 30, 2026, issuer weightings over 5%, in aggregate, comprised 23.74% of the EM ETF’s
total assets, and several of the Fund’s other positions were approaching the 5% threshold and may exceed that threshold through
ordinary market appreciation.
Baillie Gifford believes that
reclassifying each Fund as a non-diversified fund is in the best interests of each Fund and its shareholders and will provide Baillie
Gifford with increased investment flexibility to
actively manage
each Fund’s portfolio holdings, including the ability to freely adjust individual positions based on Baillie Gifford’s relative
risk expectations and investment thesis for individual issuers. The Board, including the Trustees who are not interested persons of the
Funds (as defined in the 1940 Act), unanimously recommends approval of each Proposal. A summary of the Board’s considerations for
approving the Proposal for each Fund is included below under the heading, “What were the Board’s
considerations?”
As noted above, if shareholders
approve the reclassification of a Fund to a non-diversified fund, the Fund’s fundamental investment policies regarding diversification
of investments will be changed to reflect that the Fund is non-diversified. Such Fund’s other investment policies will remain unchanged,
including the Fund’s policy concerning industry concentration.
Who is eligible to vote?
Only shareholders of a Fund
as of the close of business on [ ], 2026 (the “Record Date”), will be entitled to vote or give voting instructions at the
applicable Meeting, and will be entitled to one vote for each share they hold.
Will the reclassification have tax consequences
for the Fund?
Approval of these Proposals
will not affect the Funds’ ability to comply with the diversification and other requirements of the Code, which are applicable to
the Funds so that the Funds will not be subject to U.S. federal income taxes on their respective net investment income. In this regard,
the applicable diversification requirements imposed by the Code provide that each Fund must diversify its holdings so that at the end
of each quarter of the Fund’s taxable year (i) at least 50% of the market value of the Fund’s total assets is represented
by cash and cash items, U.S. government securities, the securities of other regulated investment companies and other securities, with
such other securities of any one issuer limited for purposes of this calculation to an amount not greater than 5% of the value of the
Fund’s total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of the Fund’s total assets is invested in (x) the securities of any one issuer or of two or more issuers which the Fund controls
and which are engaged in the same, similar, or related trades or businesses (other than U.S. government securities or the securities of
other regulated investment companies) or (y) in the securities of one or more publicly traded partnerships.
Will the reclassification increase the Funds’
risk profile?
Baillie Gifford believes that
moving to a non-diversified classification can enhance a Baillie Gifford’s ability to manage portfolio risk and can potentially
decrease overall portfolio risk by providing Baillie Gifford with more flexibility to adjust individual positions based on Baillie Gifford’s
relative risk expectations for specific issuers. The change from a diversified fund to a non-diversified fund does not necessarily mean
that Baillie Gifford will manage a Fund as a more concentrated portfolio, although Baillie Gifford will have greater flexibility in this
regard, and Baillie Gifford does not anticipate any material change to each Fund’s investment approach. Additionally, the removal
of the constraints tied to diversified fund status is not expected to change Baillie Gifford’s approach to risk controls as they
impact the oversight and management of the Funds’ investment portfolios. However, to the extent a Fund allocates a larger portion
of investments to a smaller number of issuers, such Fund will be exposed to the risks associated with such issuers to a greater extent
than if the Fund spread out its investments more broadly across a larger number of issuers. Poor performance by the issuer of any one
of these larger holdings could adversely affect a Fund operating as a non-diversified fund to a greater extent than if the Fund operated
as a more broadly diversified fund. While investing a larger portion of a Fund’s assets in the stocks of fewer issuers may prove
beneficial when such issuers outperform the market, larger investments in the stocks of fewer issuers may also magnify any negative returns
or
underperformance
by such issuers. In general, because a Fund’s performance may become more closely tied to the value of a single issuer or small
number of issuers, it is likely to become more volatile than the performance of more diversified funds. However, Baillie Gifford believes
these additional risks are outweighed by the potential for improved Fund performance and greater flexibility afforded to Baillie Gifford.
As discussed above, there have been significant increases in the market capitalization of certain technology-related, emerging-markets
issuers currently held by the Funds and included in the Index. These recent and trending changes in stock market dynamics have the potential
to increase the volatility of prices and the investment risks associated with companies contained in broad-based equity indices more
generally, as the financial fortunes of a handful of issuers can have an outsized impact across the full swath of listed companies in
emerging markets. The limitations imposed on diversified funds under the 1940 Act restrict Baillie Gifford’s flexibility to actively
manage these positions. Baillie Gifford believes that moving to a non-diversified classification can enhance the Funds’ ability
to manage portfolio risk and can potentially decrease overall portfolio risk by providing Baillie Gifford with more flexibility to adjust
individual positions based on Baillie Gifford’s relative risk expectations for these issuers.
If shareholders approve the reclassification of
a Fund as a non-diversified fund, the following language will be added to the Fund’s “Principal Risks” section:
| EM Mutual Fund |
EM ETF |
|
Non-Diversification Risk – The
Fund is classified as a “non-diversified” fund. A non-diversified fund may hold a smaller number of portfolio securities,
with larger positions in each security it holds, than many other mutual funds. To the extent the Fund invests in a relatively small number
of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a
larger number of issuers. The value of the Fund’s shares may be more volatile than the values of shares of more diversified funds.
See also “Focused Investment Risk.”
|
Non-Diversification Risk – The Fund
is classified as a “non-diversified” fund. A non-diversified fund may hold a smaller number of portfolio securities, with
larger positions in each security it holds, than many other funds. To the extent the Fund invests in a relatively small number of issuers,
a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number
of issuers. The value of the Fund’s shares may be more volatile than the values of shares of more diversified funds. See also “Focused
Investment Risk.”
|
Additionally, the section
titled “Additional Risks” in the Fund’s prospectus will be revised to indicate that Non-Diversification Risk is applicable
to the Fund.
Who manages the Funds?
Investment Adviser.
Baillie Gifford is the investment adviser for the Funds. Baillie Gifford, located at 3 Haymarket Square, Edinburgh, EH3 8RY, United
Kingdom, is a registered investment adviser which, together with its affiliates, advises other funds, including other mutual funds and
ETFs, and a variety of private accounts, including accounts managed on behalf of corporate and public pension plan sponsors, endowments,
foundations, sovereign wealth funds, and family office clients. Baillie Gifford was organized in 1983 and had approximate assets under
management of $[ ] billion as of [ ]. Baillie Gifford is a wholly owned subsidiary of Baillie Gifford & Co, which is controlled
by its working partners.
Administrator.
The Funds’ administrator is The Bank of New York Mellon, located at 240 Greenwich Street, New York, New York 10286.
Principal Underwriter.
The Funds’ principal underwriter is Baillie Gifford Funds Services LLC (“BGFS”), located at 780 Third Avenue, 43rd Floor,
New York, New York 10017.
What are the costs associated with each Fund’s
reclassification?
The aggregate costs and expenses
associated with the reclassification of the Funds from diversified status to non-diversified status are estimated to be approximately
$[ ] with respect to the EM Mutual Fund and $[ ] with respect to the EM ETF. These cost estimates include estimated costs for printing,
preparation, and mailing of the proxy materials and related shareholder communications. Additionally, this cost estimate includes estimated
costs to be paid to Broadridge for the EM Mutual Fund and EM ETF, respectively, to provide shareholder solicitation
services, vote tabulation services, and shareholder meeting services. Baillie Gifford has agreed to bear the direct fees and expenses
associated with each Fund’s reclassification, including the costs described above.
To the extent portfolio securities
are repositioned in connection with the change in classification from a diversified fund to a non-diversified fund, shareholders of a
Fund will indirectly incur commissions and other transaction costs typically associated with the purchase and sale of securities. Baillie
Gifford expects that any immediate costs associated with repositioning of a Fund’s holdings as a result of the change to a non-diversified
fund will be immaterial relative to the Fund’s net assets. Baillie Gifford anticipates that any resulting changes to a Fund’s
portfolio composition will occur over a period of time in response to Baillie Gifford’s view of the performance potential and relative
risk of an issuer in light of prevailing market conditions. These transactions may also generate taxable gains for shareholders, which
will vary depending on the level of repositioning of a Fund’s holdings.
What were the Board’s considerations?
In approving the change to
reclassify each Fund from diversified to non-diversified, the Board considered several factors, based on Baillie Gifford’s recommendation
and the supporting materials and information presented by Baillie Gifford and counsel to the Funds. The Board did not identify any
single factor as determinative in its analysis, but rather the Board considered a variety of factors, including those discussed below.
The Board did not allot a particular weight to any one factor or group of factors.
(a) The Board considered the
potential benefits to each Fund from operating as a non-diversified Fund, including that operating the Funds as non-diversified would
give Baillie Gifford more flexibility to manage each Fund in accordance with its established strategy. In assessing the potential benefits,
the Board took into account information from Baillie Gifford regarding the changes to the market dynamics in emerging markets and the
increasing concentration of broad-based emerging market benchmarks across a smaller number of heavily weighted issuers, and the related
impacts on Baillie Gifford’s management of the Funds’ portfolios.
(b) The Board took into consideration
Baillie Gifford’s statement that the current diversified status puts the Funds in danger of underperforming their benchmarks (as
well as any non-diversified competitor funds) in part due to having a relative underweight to issuers in which the portfolio management
team has high conviction and would potentially wish to overweight.
(c) The Board considered the
risks associated with operating as a non-diversified fund, including the increased risk that poor performance of a single investment or
a fewer number of investments will
have
a greater impact on a Fund than if it were diversified. In this regard, the Board took into account that operating as a non-diversified
fund may lead to increased volatility of investment returns. The Board considered Baillie Gifford’s belief that these additional
risks are outweighed by the potential for improved Fund performance and greater flexibility afforded to Baillie Gifford. The Board also
considered Baillie Gifford’s representation that it does not anticipate any material change to the Funds’ investment approach
or any change to Baillie Gifford’s approach to risk controls as they impact the oversight and management of the Funds’ investment
portfolios.
(d) The Board took into account
Baillie Gifford’s assessment of the anticipated costs associated with potential portfolio repositioning, if any, that would be borne
by the Funds. The Board also noted that Baillie Gifford had undertaken to bear all direct fees and expenses associated with the Funds’
reclassification.
(e) The Board considered Baillie
Gifford’s written confirmation of its belief that the reclassification is in the best interests of each Fund and its shareholders.
What if shareholders do not approve the reclassification?
If shareholders do not approve
a Fund’s reclassification from a diversified fund to non-diversified fund, there will be no changes made to that Fund’s classification
and the Fund will continue to operate as a diversified fund.
The Board, including the
Trustees who are not interested persons of the Funds (as defined in the 1940 Act), unanimously recommends approval of the reclassification
for each Fund.
The Board knows of no matters
other than those set forth herein to be brought before the Meetings. If, however, any other matters properly come before the Meetings,
it is the Board’s intention that proxies will be voted on such matters in accordance with the judgement of the persons named in
the enclosed form of proxy.
MORE INFORMATION ABOUT THE PROPOSALS
The reclassification
will become effective for a Fund only if approved by the affirmative vote of a “majority of the outstanding voting securities”
of the Fund entitled to vote. Under the 1940 Act, the vote of a “majority of the outstanding voting securities” means the
affirmative vote of the lesser of (a) 67% or more of the voting power of the securities present at the applicable Meeting or represented
by proxy, if the holders of more than 50% of the voting power of the outstanding voting securities are present or represented by proxy,
or (b) more than 50% of the voting power of the outstanding voting securities.
Quorum, and
Method of Tabulation.
For each Meeting,
40% of a Fund’s outstanding shares entitled to vote in person or by proxy as of the Record Date shall be a quorum for the transaction
of business at the Meeting. Abstentions will be treated as votes present at the Meeting but will not be treated as votes cast at such
Meeting. Thus, abstentions will be included for purposes of determining whether a quorum is present but will have the same effect as a
vote against the Proposals. There are unlikely to be any “broker non-votes” (that is, proxies from brokers or nominees indicating
that such persons have not received instructions from the
beneficial owner or other persons entitled
to vote shares on a particular matter with respect to which the brokers or nominees do not have discretionary power) at the Meeting because
broker-dealers, in the absence of specific authorization from their customers, will not have discretionary authority to vote any shares
held beneficially by the customers on the matters to be presented at the Meeting. If any broker non-votes are received, they will have
the same effect as abstentions.
Shares Outstanding.
The number of shares of the EM Mutual Fund outstanding as of [July 31, 2026], were as follows:
|
Class of Shares
Class 2
Class 3
Class 4
Class 5
Class K
Institutional Class
|
Number of Shares Outstanding
(rounded to the nearest share)
[175,135]
[6,241,221]
[15,921,575]
[50,186,202]
[105,952,272]
[76,357,716]
|
The number of shares of the
EM ETF outstanding as of [July 31, 2026], were as follows:
|
Number of Shares Outstanding
[475,000] |
Share Ownership. As
of [July 31, 2026], the officers and Trustees, as a group, beneficially owned less than 1% of any class of the outstanding shares of either Fund.
To the best of the knowledge
of each Fund, as of [July 31, 2026], the following shareholders owned of record or beneficially 5% or more of the following classes of each Fund’s
outstanding shares. All holdings are of record unless otherwise indicated.
| [Baillie
Gifford Emerging Markets Equities Fund |
| Investor |
Investor
Address |
Percentage
Ownership of
Class |
| The
Rockefeller Foundation - Class 2 |
Investments
Office 19th Floor, 420 Fifth Avenue, New York, NY 10018 |
100.00% |
| Sacramento
County Employees Retirement System - Class 4 |
980
9th Street, Suite 1900, Sacramento, CA 95814-2739 |
61.48% |
| Board
of Trustees for the Maryland State Retirement and Pension System - Class 5 |
120
E Baltimore Street, 16th Floor, Baltimore, MD 21202-6703 |
58.20% |
| Baylor
College of Medicine - Class 3 |
One
Baylor Plaza MS209 Houston, TX 77030 |
46.45% |
| City
of Austin Employees Retirement System - Class 4 |
4700
Mueller Blvd Suite 100, Austin, TX 78723 |
38.52% |
| Charles
Schwab & Co Inc Special Custody A/C FBO Customers - Institutional Class* |
211
Main Street, San Francisco, CA 94105 |
34.78% |
| City
of Hope - Class 3 |
1500
E Duarte Road, Duarte, CA 91010-3000 |
27.90% |
| National
Financial Services LLC - Institutional Class* |
499
Washington Blvd, 4th Floor, Jersey City, NJ 07310 |
26.78% |
| Beckman
Research Institute of The City of Hope - Class 3 |
1450
E Duarte Road, Duarte, CA 91010-3008 |
25.65% |
| FedEx
Corporation Employee Pension Trust - Class 5 |
942
S Shady Grove Road, Memphis, TN 38120 |
20.90% |
| SEI
Private Trust Company - Class K* |
1
Freedom Valley Drive, Oaks, PA 19456 |
19.56% |
| Charles
Schwab & Co Inc Special Custody A/C FBO Customers - Class K* |
211
Main Street, San Francisco, CA 94105 |
16.77% |
| Pershing
LLC - Institutional Class* |
PO
Box 2052, Jersey City, NJ 07303 |
13.01% |
| LPL
Financial FBO Customer Accounts - Institutional Class* |
PO
Box 509046, San Diego, CA 92150-9046 |
10.79% |
| Raymond
James Omnibus for Mutual Funds House Account - Institutional Class* |
880
Carillon Parkway, St Petersburg, FL 33716 |
10.08% |
| Northern
Trust C/O Custodian - Class K* |
50
S Lasalle Street, Chicago, IL 60675 |
9.41% |
| State
Street Bank and Trust Company, As Trustee for PwC Defined Contribution Investment Trust - Class K |
1776
Heritage Drive, North Quincy, MA 02171 |
8.39% |
| Empower
Trust FBO Wells Fargo & Co - Class K |
8515
E Orchard Rd, Greenwood Village, CO 80111 |
7.32% |
| AT&T
Services Inc. SBC Master Pension Trust - Class 5 |
208
S Akard St, 27th Fl, Dallas, TX 75202 |
6.92% |
| Fresno
County Employees Retirement Association - Class K |
7772
N Palm Avenue, Fresno, CA 93711-5734 |
6.37% |
| Fire
and Police Pension Association of Colorado - Class 5 |
7979
East Tufts Avenue Ste 900, Denver, CO 80237-2985 |
5.94% |
| Mac
& Co - Class K* |
500
Grant Street Room 151-1010, Pittsburgh, PA 15258 |
5.68% |
| The
Salvation Army A Georgia Corporation - Class 5 |
1424
Northeast Expwy, Atlanta, GA 30329 |
5.19%] |
To the best of the knowledge
of each Fund, as of [July 31, 2026], there were no shareholders of record that owned 25% or more of either Fund’s outstanding shares.
Solicitation of Proxies.
The Board and employees of Baillie Gifford and BGFS may solicit proxies in person or virtually, or by mail or telephone. The
Funds have engaged Broadridge to provide shareholder meeting services as well as vote solicitation and tabulation services. A proxy may
be revoked prior to its exercise by a signed writing filed with Broadridge Investor Communication Solutions, Inc., 51 Mercedes Way, Edgewood,
New York 11717, or by attending the applicable Meeting and voting at the Meeting. Please refer to the section of this Proxy Statement
entitled “What are the costs associated
with each Fund’s reclassification?”
for further information concerning these and other costs associated with these Proposals.
Voting instructions will be
solicited primarily by mailing this Proxy Statement and its enclosures, but voting instructions may also be solicited through further
e-mailings, telephone calls, personal interviews or mailings by officers. Officers of the Trusts or their agents may solicit voting instructions
by mail, e-mail, telephone, facsimile, internet, or in person. Each Trust has engaged Broadridge Investor Communication Solutions, Inc.,
51 Mercedes Way, Edgewood, New York 11717, to assist in the distribution of proxy materials and the solicitation and tabulation of proxies
for the Meetings.
Virtual Meeting
Each Meeting will be a virtual
meeting, which will be conducted via live webcast. To participate in a Meeting virtually via the Internet, please visit [www.virtualshareholdermeeting.com/[
]] for the EM Mutual Fund and/or [www.virtualshareholdermeeting.com/[ ]] for the EM ETF.
Attending the Virtual Meeting
Each Meeting will be held
entirely online using the unique link for that Meeting provided above. Additional information about the Meetings is provided below:
The webcast for the EM Mutual
Fund Meeting will begin promptly at [9:00 a.m.] Eastern Time on [ ], 2026, and the webcast for the EM ETF Meeting will begin promptly
at [9:30 a.m.] Eastern Time on [ ], 2026.
We encourage you to access
the applicable Meeting prior to the start time. Online check-in will begin [15 minutes prior to the designated start time for each Meeting],
Eastern Time, and you should allow ample time for the check-in procedures.
Technical Assistance for
the Virtual Meeting
We encourage shareholders
to log into the applicable virtual Meeting fifteen (15) minutes prior to the start of the Meeting to test their Internet connectivity.
If you encounter any technical difficulties with the virtual Meeting, the Technical Support phone numbers will be posted on the virtual
shareholder meeting website. Technical Support will be available starting [15 minutes prior to the designated start time for each Meeting],
Eastern Time.
Questions from shareholders
to be considered at the Meetings must be submitted to Broadridge at [ ] no later than [8:00 a.m. ET] on [ ], 2026.
[Shareholders whose
shares are held by a broker, bank or other nominee must first obtain a "legal proxy" from the applicable nominee/record
holder, who will then provide the shareholder with a newly-issued control number. Obtaining a legal proxy may take several days.
Once shareholders have obtained a new control number, they must visit [www.virtualshareholdermeeting.com/[ ]][
] for the EM Mutual Fund and/or [www.virtualshareholdermeeting.com/[ ]] for the EM ETF and submit their name and newly
issued control number in order to register to participate in and vote at a Meeting.]
Any shareholder who does not
expect to virtually attend the Meetings is urged to vote using the touch-tone telephone or internet voting instructions that follow or
by indicating voting instructions on the enclosed proxy card, dating and signing it, and returning it in the envelope provided, which
needs no postage if mailed in the United States. In order to avoid unnecessary expense, shareholders are urged to respond promptly, no
matter how large or small their holdings may be. If shareholders wish to wait until the Meetings to vote their shares, they will need
to follow the instructions available on the Meetings’ website during the Meetings in order to do so.
Only
one copy of this Proxy Statement may be mailed to a shareholder holding shares in multiple accounts within a Fund or across several Funds.
Additionally, unless the Funds have received contrary instructions, only one copy of this Proxy Statement will be mailed to a given address
where two or more shareholders share that address. Additional copies of the Proxy Statement will be delivered promptly upon request.
Requests may be sent to the Manager at [3 Haymarket Square, Edinburgh, Scotland EH3 8RY], or by emailing northamericanvehiclesteam@bailliegifford.com,
or by telephoning collect 1-844-394-6127 (Attention: North American Vehicles Team) before 12:00 noon (Eastern Time) on any business day.
Revocation of Proxies.
Proxies, including proxies given by telephone or via the Internet, may be revoked at any time before the Meetings, by a written revocation
received by the Secretary of the Fund or by properly executing a later-dated proxy or by attending a Meeting and voting.
Shareholder Proposals.
Each Trust is a Massachusetts business trust and, as such, is not required to hold annual meetings of shareholders. However, the Trustees
of each Trust may from time-to-time schedule special meetings of shareholders. Any shareholder who wishes to submit a proposal to be considered
by a Fund’s shareholders at the next meeting of shareholders should send the proposal to Baillie Gifford Emerging Markets Equities
Fund, c/o Gareth Griffiths, 780 Third Avenue, 43rd Floor, New York, New York 10017, or Baillie Gifford Emerging Markets
ETF, c/o Gareth Griffiths, 780 Third Avenue, 43rd Floor, New York, New York 10017, as applicable, so as to be received
within a reasonable time before the Board of Trustees makes the solicitation relating to such meeting. The submission by a shareholder
of a proposal for inclusion in the proxy materials does not guarantee that it will be included. Shareholder proposals are subject
to certain requirements under the federal securities laws.
Adjournment.
If the necessary quorum to transact business is not present or sufficient votes in favor of a Proposal are not received by the time scheduled
for the Meetings, the persons named as proxies may propose adjournments of the applicable Meeting to permit further solicitation of proxies.
Any adjournment will require the affirmative vote of a majority of the voting power of the outstanding shares entitled to vote on the
question present at the Meeting or by proxy to be adjourned. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of the applicable Proposal. They will vote against any such adjournment those
proxies required to be voted against the applicable Proposal. They will not vote any proxy that directs them to abstain from voting
on the applicable Proposal.
MISCELLANEOUS
Available Information
A copy of each Fund’s
most recent prospectus, annual and semiannual shareholder reports, and Statement of Additional Information is available at no cost by
visiting the Funds’ website at [http://USmutualfund.bailliegifford.com]; by calling collect 1-844-394-6127; by emailing northamericanvehiclesteam@bailliegifford.com
(Attention: North American Vehicles Team); or by writing to Baillie Gifford at 3 Haymarket Square, Edinburgh, Scotland, UK EH3 8RY.
Other Business
Management of the Funds knows
of no business other than the matters specified above that will be presented at the Meetings. Because matters not known at the time
of the solicitation may come before the Meetings, the proxy as solicited confers discretionary authority with respect to such matters
as properly come before the Meetings, including any adjournment or adjournments thereof, and it is the intention of the persons named
in the enclosed form of proxy to vote this proxy in accordance with their judgment on such matters.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
Notice To Banks, Broker-Dealers and Voting
Trustees And Their Nominees.
Please advise [Baillie Gifford
Emerging Markets Equities Fund, c/o Baillie Gifford Overseas Limited, 780 Third Avenue, 43rd Floor, New York, New York 10017, or Baillie Gifford Emerging
Markets ETF, c/o Baillie Gifford Overseas Limited, 780 Third Avenue, 43rd Floor, New York, New York 10017], as applicable, whether other persons are
beneficial owners of shares for which proxies are being solicited and, if so, the number of copies of the Proxy Statement you wish to
receive in order to supply copies to the beneficial owners of the shares.
[ ], 2026
BAILLIE GIFFORD EMERGING MARKETS EQUITIES FUND, a series of
BAILLIE GIFFORD FUNDS
BAILLIE GIFFORD EMERGING MARKETS ETF, a series of
BAILLIE GIFFORD ETF TRUST
