The manager has launched the Baillie Gifford Enhanced Yield Fund (BAGEY) with BNY (NYSE: BNY), a global financial services company, delivering the first publicly available fully native UK-regulated tokenised fund.

BAGEY, denominated in dollars, gives eligible investors access to an actively managed, short-duration portfolio of public corporate bonds through a UK-regulated OEIC structure on Ethereum and Solana. Tokens are issued directly as the investor’s holding in the Fund, with public blockchains used as the legal source of truth for ownership.

The product creates an asset that is truly native, rather than wrapping an existing product or legacy infrastructure. By using public blockchains compliantly as part of a fund’s core architecture, Baillie Gifford is extending the standards investors expect from regulated investment funds into infrastructure designed for markets that operate continuously, transparently and programmatically. This opens up new possibilities for how fund interests are issued, transferred and used.

The Enhanced Yield portfolio currently offers a yield of c.7%, with two-year duration and an average credit quality of BBB.² The Fund is daily-dealt, and will be available to eligible investors in the UK, Switzerland and Cayman Islands, subject to applicable laws, regulations and distribution restrictions.

Theo Golden, head of digital assets and tokenisation at Baillie Gifford, said: “Tokenisation will only matter if it makes finance fundamentally better. A digital wrapper around yesterday’s infrastructure is not enough. Clients do not need novelty for its own sake; they need cleaner ownership, stronger governance, faster settlement and infrastructure they can trust.

“That is what native issuance changes. The Baillie Gifford Enhanced Yield Fund is not a token placed on top of a fund. It is a fund issued onchain, with the blockchain serving as the register of record. Investors hold the fund directly: direct ownership, direct recourse.

“We are taking this step, and setting a new standard, by bringing together the combined prowess of two historic institutions: Baillie Gifford’s active investment expertise and long-term approach, and BNY’s innovative, resilient infrastructure.”

“This is what we can achieve when standards drive innovation, and the industry collaborates to build better infrastructure for clients. Same discipline; better rails.”
Baillie Gifford has collaborated with BNY, a long-term strategic relationship for the firm, in co-designing the product.

BNY will be providing tokenisation and wallet infrastructure for the Fund (subject to applicable regulatory approval), supporting a direct issuance model designed to reduce operational complexity and improve transparency.

NatWest Trustee and Depositary Services Limited will act as the fund’s Depositary.