Item 8. Changes in and Disagreements with Accountants
for Open-End Management Investment Companies.
Not applicable.
Item 9. Proxy Disclosures for Open-End Management
Investment Companies.
Meeting 1 — Trustee Election Meeting
(Baillie Gifford Funds)
Special meeting, 9:00 a.m. Eastern Time,
28 April 2026 (Proxy Statement dated 30 January 2026).
(1) Date and type of meeting - 28 April 2026;
a special meeting of shareholders.
(2) Election of directors — elected and continuing
- This meeting did involve the election of Trustees. All shareholders voted together on a Trust-level basis.
- Elected at the meeting (effective open of business, 29 April 2026): Howard W. Chin, Pamela M. J. Cox, John D. Kavanaugh, Maureen
A. Miller, Donald P. Sullivan Jr., and Michael Stirling-Aird.
- Continuing after the meeting: the minutes do not identify any Trustee whose term continued without being up for election — the
six nominees above constituted the full slate voted on. If there were any incumbent Trustees not standing at this meeting, that is not
recorded in the minutes and would need to be confirmed separately.
(3) Matter voted upon
and votes cast
- Matter: election of the six Trustee nominees named in the Proxy Statement. Trustees are elected by a
plurality, so votes were recorded
as "For" and "Withheld" only (no "Against"). The shareholders had just two options to vote on the Trustee
proposal FOR or WITHHOLD. The meetings were processed this as a dual proxy; the Trustee proposal (routine matter) was voted at one meeting
and the other 3 proposals (non-routine matters) at the 2nd meeting. Broker non-votes were not applicable when using this
approach.
| Trustee Nominee |
Votes For |
|
Votes Withheld |
| Howard W. Chin |
330,043,773.261 |
|
827,899.870 |
| Pamela M. J. Cox |
307,734,302.095 |
|
23,137,371.036 |
| John D. Kavanaugh |
330,048,504.755 |
|
823,168.376 |
| Maureen A. Miller |
329,993,592.227 |
|
878,080.904 |
| Michael Stirling-Aird |
330,049,968.869 |
|
821,704.262 |
| Donald P. Sullivan Jr. |
330,069,678.494 |
|
801,994.637 |
Each nominee was approved by a plurality of the
Trust's shares present in person or by proxy.
Meeting 2 — Fund Reorganisations Meeting
Special meeting, 9:30 a.m. Eastern Time,
28 April 2026 (Proxy Statement/Prospectus dated 4 February 2026).
(1) Date and type of meeting - 28 April 2026; a special meeting
of shareholders.
(2) Election of directors elected and continuing
- Not applicable — this meeting did not involve the election of directors. It concerned two reorganisation proposals only.
(3) Matters voted upon and votes cast
- First Proposal: approval of the Agreement and Plan of Reorganization of Baillie Gifford International Concentrated Growth Equities Fund
into Baillie Gifford International Concentrated Growth ETF.
- Second Proposal: approval of the Agreement and Plan of Reorganization of Baillie Gifford Long Term Global Growth Fund into Baillie Gifford
Long Term Global Growth ETF.
- Abstentions and broker non-votes are not separately tabulated in the minutes (votes are recorded as For / Against / Withheld). The meetings
were processed this as a dual proxy; the Trustee proposal (routine matter) was voted at one meeting and the other 3 proposals (non-routine
matters) at the 2nd meeting. Broker non-votes were not applicable when using this approach.
| Matter |
Votes For |
Votes
Against |
Votes
Withheld |
| First Proposal (Int'l Concentrated Growth Equities Fund) |
5,623,751.270 |
16,588.566 |
134,380.886 |
| Matter |
Votes For |
Votes
Against |
Votes
Withheld |
| Second Proposal (Long Term Global Growth Fund) |
10,117,218.075 |
11,299.356 |
137,023.423 |
Each proposal was approved by the holders of a
majority of the relevant Fund's shares.
Item 10. Remuneration Paid to Directors, Officers,
and Others of Open-End Management Investment Companies.
Baillie Gifford Funds (the “Trust”)
paid $457,472 to the Directors in compensation during the period. No compensation was paid to Officers or others Open-End Managements
Investment Companies.
Item 11. Statement Regarding Basis for Approval
of Investment Advisory Contract.
Baillie
Gifford Funds
Board
considerations
Regarding 2026 Contract Renewal
On June 17, 2026, the
Board of Trustees (the “Board”) of Baillie Gifford Funds (the “Trust”), including those trustees who are not “interested
persons” as defined by the Investment Company Act of 1940, as amended (the “Independent Trustees”), approved the renewal
of the investment advisory agreement (the “Advisory Agreement”) between the Trust, on behalf of the funds listed below, respectively
(each a “Fund” and collectively, the “Funds”), and Baillie Gifford Overseas Limited (the “Manager”):
| ● Baillie Gifford Global Alpha Equities Fund |
● Baillie Gifford Emerging Markets Equities Fund |
| ● Baillie Gifford International Alpha Fund |
● Baillie Gifford Emerging Markets ex China Fund |
| ● Baillie Gifford International Growth Fund |
● Baillie Gifford U.S. Equity Growth Fund |
| ● Baillie Gifford China Equities Fund |
|
As
part of the review process, the Independent Trustees met independently of Trust management and of the interested trustee of the Board
to consider the renewal of the Advisory Agreement. During the review process, the Independent Trustees were represented by independent
legal counsel. The Independent Trustees reviewed materials received from the Manager, Broadridge, an independent provider of mutual
fund data (“Broadridge”), and independent legal counsel. After reviewing the information received, the Independent Trustees
requested supplemental information, and the Manager provided additional materials and other information in response. The Board determined
that, given the totality of the information provided with respect to the Advisory Agreement, the Board had received sufficient information
to approve the Advisory Agreement for each Fund.
The Board concluded that it
was in the best interests of each Fund to renew the Advisory Agreement. In reaching this conclusion for 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.
The
Board considered the nature, extent and quality of the services provided by the Manager to each Fund. The Board noted that: (1) pursuant
to the Funds’ Advisory Agreement, the Manager provides portfolio management services to the Funds and receives an advisory fee;
(2) pursuant to a separate Administration, Supervisory and Sub-Accounting Services Plan and Administration and Supervisory Agreement
for Class K and Institutional Class shares for each Fund that offers those classes, the Manager receives an administration and
supervisory fee; and (3) pursuant to a separate Shareholder Service Plan and Shareholder Servicing Agreement for Class 2, Class 3,
Class 4 and Class 5 shares for each Fund that offers those classes, the Manager receives a shareholder service fee, the amount
of which varies among the share classes (the administration and supervisory fee and the shareholder service fee are each referred to as
a “Class specific fee” and together are referred to as “Class specific fees”). The Board considered
the background and qualifications of the investment, compliance and administrative personnel involved in the management and oversight
of the Funds, reviewed information regarding each Fund’s performance, advisory fee and applicable Class specific fee, and expense
ratios for certain share classes compared to similar funds, and considered the experience of the Manager in providing services to each
Fund. The Board considered, generally, that shareholders chose to invest or remain invested in a Fund knowing the Fund’s growth
investment strategy and the Manager’s long-term investing philosophy. The Manager is a wholly owned subsidiary of Baillie Gifford &
Co, a privately owned U.K. investment management firm that has been in operation since 1908. In assessing each Fund’s performance,
the Board considered that performance is evaluated at the quarterly Board meetings and that the Board regularly meets with portfolio managers
and other investment team members for each Fund to discuss performance. The Board considered that certain Funds had instances of underperformance
over various time periods and took into account the Manager’s explanations for the underperformance. The Board also considered the
Manager’s discussions of its investment and risk management processes and the Manager’s work to seek to improve investment
performance. The Board considered that the Manager was consistent in its long-term investing philosophy and that a Fund may experience
periods of underperformance. The Board concluded that, with respect to each Fund: (1) the Fund’s investment performance was
acceptable; or (2) it was satisfied with the Manager’s responses and/or efforts to improve investment performance. In evaluating
the advisory fee paid by each Fund, and in particular when assessing comparative data, the Board considered not only the advisory fee,
but also the combination of the advisory fee and the applicable Class specific fee. The Board also considered that the advisory fee
schedule for each Fund includes breakpoints. The Board considered other benefits derived by the Manager and its affiliates from the relationship
to the Funds, including the Manager’s receipt of the Class specific fee. The Board concluded that the nature, extent and quality
of the services provided by the Manager to the Funds, pursuant to the Advisory Agreement, were satisfactory.
The Board reviewed the Manager’s
revenues received with respect to the Funds and the nature of the Manager’s resources expended in providing solely advisory services
as well as additional services to the Funds. The Board considered the Manager’s estimated profitability with respect to the Funds
and concluded that it was not unreasonable.
The Board noted the following
items specific to the referenced Funds.
Baillie Gifford Global Alpha Equities Fund
The
Board reviewed total return information for the one-year, three-year, five-year, ten-year and since inception (November 15, 2011)
periods ended March 31, 2026 for the Fund compared to a benchmark index (MSCI ACWI Index) and the average total returns of a performance
universe of funds
provided by Broadridge, and calendar year returns for 2016 through 2025 for the Fund compared to the benchmark index
and a peer group of funds provided by Broadridge. The Board noted that the Fund’s total return was below the benchmark index
and the average of the performance universe for the one-year, three-year, five-year and ten-year periods and below the benchmark index
and above the average of the performance universe for the since inception period.
The Board reviewed the advisory
fee (plus the applicable Class specific fee) and net expense ratio for the Fund’s Class 2 and Institutional Class, and
compared them to the average management fees and expense ratios of an expense peer group and expense universe of funds based on data provided
by Broadridge. The comparable fund information showed that the Fund’s contractual advisory fee (plus the applicable Class specific
fee) was below the average contractual management fee of the expense peer group. The Board also reviewed the fee schedules for other clients
of the Manager with a similar investment mandate. The Board considered whether there were economies of scale with respect to the management
of the Fund and whether the Fund benefits from economies of scale. The Board considered that the Fund’s contractual advisory fee
(plus the applicable Class specific fee) was on the low end of the spectrum of the expense peer group. On the basis of the information
provided, the Board concluded that the advisory fee was reasonable.
Baillie Gifford International Alpha Fund
The
Board reviewed total return information for the one-year, three-year, five-year, ten-year and since inception (February 7,
2008) periods ended March 31, 2026 for the Fund compared to a benchmark index (MSCI ACWI ex USA Index) and the average total
returns of a performance universe of funds provided by Broadridge, and calendar year returns for 2016 through 2025 for the
Fund compared to the benchmark index and a peer group of funds provided by Broadridge. The Board noted that the Fund’s total
return was below the benchmark index and the average of the performance universe for the one-year, three-year, five-year and
ten-year periods and below the benchmark index and above the average of the performance universe for the since inception period.
The Board reviewed the advisory
fee (plus the applicable Class specific fee) and net expense ratio for the Fund’s Class 2 and Institutional Class, and
compared them to the average management fees and expense ratios of an expense peer group and expense universe of funds based on data provided
by Broadridge. The comparable fund information showed that the Fund’s contractual advisory fee (plus the applicable Class specific
fee) was below the average contractual management fee of the expense peer group. The Board also reviewed the fee schedules for other clients
of the Manager with a similar investment mandate. The Board considered whether there were economies of scale with respect to the management
of the Fund and whether the Fund benefits from economies of scale. The Board considered the impact of advisory fee breakpoints in 2025
and noted that the Fund’s contractual advisory fee (plus the applicable Class specific fee) was on the low end of the spectrum
of the expense peer group. On the basis of the information provided, the Board concluded that the advisory fee was reasonable.
Baillie Gifford International Growth Fund
The
Board reviewed total return information for the one-year, three-year, five-year, ten-year and since inception (March 6, 2008) periods
ended March 31, 2026 for the Fund compared to a benchmark index (MSCI ACWI ex USA Index) and the average total returns of a performance
universe of funds provided by Broadridge, and calendar year returns for 2016 through 2025 for the Fund compared to the benchmark index
and a peer group of funds provided by Broadridge. The Board noted that the Fund’s total return was below the benchmark index
and the average of the performance universe for the one-year, three-year and five-year periods, below the benchmark index and above the
average of the performance
universe for the ten-year period and above the benchmark index and the average of the performance universe
for the since inception period.
The Board reviewed the advisory
fee (plus the applicable Class specific fee) and net expense ratio for the Fund’s Class 2 and Institutional Class, and
compared them to the average management fees and expense ratios of an expense peer group and expense universe of funds based on data provided
by Broadridge. The comparable fund information showed that the Fund’s contractual advisory fee (plus the applicable Class specific
fee) was below the average contractual management fee of the expense peer group. The Board also reviewed the fee schedules for other clients
of the Manager with a similar investment mandate. The Board considered whether there were economies of scale with respect to the management
of the Fund and whether the Fund benefits from economies of scale. The Board considered the impact of advisory fee breakpoints in 2025
and noted that the Fund’s contractual advisory fee (plus the applicable Class specific fee) was on the low end of the spectrum
of the expense peer group. On the basis of the information provided, the Board concluded that the advisory fee was reasonable.
Baillie Gifford China Equities Fund
The
Board reviewed total return information for the one-year, three-year and since inception (July 7, 2021) periods ended March 31,
2026 for the Fund compared to a benchmark index (MSCI China All Shares Index) and the average total returns of a performance universe
of funds provided by Broadridge, and calendar year returns for 2022 through 2025 for the Fund compared to the benchmark index and a peer
group of funds provided by Broadridge. The Board noted that the Fund’s total return was above the benchmark index and below
the average of the performance universe for the one-year period and below the benchmark index and the average of the performance universe
for the three-year and since inception periods.
The Board reviewed the advisory
fee (plus the applicable Class specific fee) and net expense ratio for the Fund’s Class K and Institutional Class, and
compared them to the average management fees and expense ratios of an expense peer group and expense universe of funds based on data provided
by Broadridge. The comparable fund information showed that the Fund’s contractual advisory fee (plus the applicable Class specific
fee) was below the average contractual management fee of the expense peer group. The Board also reviewed the fee schedules for other clients
of the Manager with a similar investment mandate. The Board considered whether there were economies of scale with respect to the management
of the Fund and whether the Fund benefits from economies of scale. The Board considered the Fund’s small asset size and that the
Fund’s contractual advisory fee (plus the applicable Class specific fee) was on the low end of the spectrum of the expense
peer group and also considered the expense limitation in place until April 30, 2027. On the basis of the information provided, the
Board concluded that the advisory fee was reasonable.
Baillie Gifford Emerging Markets Equities Fund
The
Board reviewed total return information for the one-year, three-year, five-year, ten-year and since inception (April 4, 2003) periods
ended March 31, 2026 for the Fund compared to a benchmark index (MSCI Emerging Markets Index) and the average total returns of a
performance universe of funds provided by Broadridge, and calendar year returns for 2016 through 2025 for the Fund compared to the benchmark
index and a peer group of funds provided by Broadridge. The Board noted that the Fund’s total return was above the benchmark
index and the average of the performance universe for the one-year, three-year, ten-year and since inception periods and below the benchmark
index and the average of the performance universe for the five-year period.
The Board reviewed the advisory
fee (plus the applicable Class specific fee) and net expense ratio for the Fund’s Class 2 and Institutional Class, and
compared them to the average management fees and expense ratios of an expense peer group and expense universe of funds based on data provided
by Broadridge. The comparable fund information showed that the Fund’s contractual advisory fee (plus the applicable Class specific
fee) was below the average contractual management fee of the expense peer group. The Board also reviewed the fee schedules for other clients
of the Manager with a similar investment mandate. The Board considered whether there were economies of scale with respect to the management
of the Fund and whether the Fund benefits from economies of scale. The Board considered the impact of advisory fee breakpoints in 2025
and noted that the Fund’s contractual advisory fee (plus the applicable Class specific fee) was on the low end of the spectrum
of the expense peer group. On the basis of the information provided, the Board concluded that the advisory fee was reasonable.
Baillie Gifford Emerging Markets ex China Fund
The
Board reviewed total return information for the one-year, three-year and since inception (December 28, 2021) periods ended March 31,
2026 for the Fund compared to a benchmark index (MSCI Emerging Markets ex China Index) and the average total returns of a performance
universe of funds provided by Broadridge, and calendar year returns for 2022 through 2025 for the Fund compared to the benchmark index
and a peer group of funds provided by Broadridge. The Board noted that the Fund’s total return was above the benchmark index
and the average of the performance universe for the one-year, three-year and since inception periods.
The Board reviewed the advisory
fee (plus the applicable Class specific fee) and net expense ratio for the Fund’s Class K and Institutional Class, and
compared them to the average management fees and expense ratios of an expense peer group and expense universe of funds based on data provided
by Broadridge. The comparable fund information showed that the Fund’s contractual advisory fee (plus the applicable Class specific
fee) was below the average contractual management fee of the expense peer group. The Board also reviewed the fee schedules for other clients
of the Manager with a similar investment mandate. The Board considered whether there were economies of scale with respect to the management
of the Fund and whether the Fund benefits from economies of scale. The Board considered the Fund’s small asset size and that the
Fund’s contractual advisory fee (plus the applicable Class specific fee) was on the low end of the spectrum of the expense
peer group and also considered the expense limitation in place until April 30, 2027. On the basis of the information provided, the
Board concluded that the advisory fee was reasonable.
Baillie Gifford U.S. Equity Growth Fund
The
Board reviewed total return information for the one-year, three-year, five-year and since inception (December 5, 2016) periods ended
March 31, 2026 for the Fund compared to a primary benchmark index (S&P 500 Index) and a secondary benchmark index (Russell 1000
Growth Index) and the average total returns of a performance universe of funds provided by Broadridge, and calendar year returns for 2017
through 2025 for the Fund compared to the benchmark indices and a peer group of funds provided by Broadridge. The Board noted that
the Fund’s total return was below the benchmark indices and the average of the performance universe for the one-year, three-year
and five-year periods and below the benchmark indices and above the average of the performance universe for the since inception period.
The Board further noted that the Manager was considering the potential liquidation and termination of the Fund. In light of these developments,
the Board determined to renew the Advisory Agreement for a six-month period ending December 31, 2026. Subsequent to the Board’s
renewal of the Fund’s Advisory Agreement, the Board was presented with and approved a formal proposal to liquidate and terminate
the Fund.
The Board reviewed the advisory
fee (plus the applicable Class specific fee) and net expense ratio for the Fund’s Class K and Institutional Class, and
compared them to the average management fees and expense ratios of an expense peer group and expense universe of funds based on data provided
by Broadridge. The comparable fund information showed that the Fund’s contractual advisory fee (plus the applicable Class specific
fee) was below the average contractual management fee of the expense peer group. The Board also reviewed the fee schedules for other clients
of the Manager with a similar investment mandate. The Board considered whether there were economies of scale with respect to the management
of the Fund and whether the Fund benefits from economies of scale. The Board considered the Fund’s small asset size and that the
Fund’s contractual advisory fee (plus the applicable Class specific fee) was on the low end of the spectrum of the expense
peer group and also considered the expense limitation in place until April 30, 2027. On the basis of the information provided, the
Board concluded that the advisory fee was reasonable.
Conclusion
Based upon all the information
considered and the conclusions reached, the Board determined that the terms of the Advisory Agreement for the Funds were reasonable and
fair and that the renewal of the Advisory Agreement was in the best interests of each Fund.
