Key Takeaways
- • Baillie Gifford launched the Enhanced Yield Fund (BAGEY), a tokenised fixed-income fund targeting approximately 7% yield in USD across four regulated jurisdictions: UK, Switzerland, Hong Kong, and the Cayman Islands, marking the first actively managed bond strategy available in tokenised form.
- • The fund is exclusively distributed as a natively issued tokenised security and is available only to eligible professional investors, with custody supported by four regulated digital asset custodians: BNY, Anchorage Digital, Archax, and BitGo Bank & Trust.
- • BAGEY represents a strategic expansion beyond tokenised money-market funds into actively managed fixed income, targeting traditional institutional investors, crypto-native family offices, and wealth managers seeking onchain exposure to short-duration bond portfolios with two-year duration and average BBB credit quality.
- • The fund invests in a diversified portfolio of government and corporate bonds, positioning tokenised securities infrastructure as capable of supporting institutional-grade actively managed strategies rather than passive or cash management products alone.
Summary
Baillie Gifford, the Edinburgh-established independent asset manager founded in 1908, has opened the Baillie Gifford Enhanced Yield Fund to eligible professional investors across four key markets, signalling a significant evolution in tokenised financial products. The fund is now operational in the UK, Switzerland, Hong Kong, and the Cayman Islands, representing a regulated expansion of on-chain investment infrastructure beyond the cash management category where tokenised products have traditionally concentrated.
BAGEY is designed as a US dollar-denominated, UK-regulated OEIC (Open-Ended Investment Company) investing in actively managed fixed income. The fund targets approximately 7% yield, operates with a two-year duration profile, and maintains an average credit quality of BBB across its portfolio of government and corporate bonds. The strategy explicitly pursues enhanced yield relative to its benchmark while reducing interest rate sensitivity through short-duration positioning. Critically, BAGEY is available exclusively as a natively issued tokenised fund—a deliberate structural choice that anchors the strategy to distributed ledger infrastructure from inception rather than retrofitting tokenisation to a traditional fund.
Custody and digital asset infrastructure support the fund through four regulated custodians: BNY, Anchorage Digital, Archax, and BitGo Bank & Trust, ensuring institutional-grade safeguarding and settlement capabilities. Baillie Gifford identified three key investor segments: digital-market participants and crypto-native investors (including family offices) already operating onchain; traditional institutional clients testing digital asset exposure, such as defined contribution pension platforms, financial advisory services, and wealth managers; and crypto-native investors seeking professionally managed fixed-income exposure without onchain implementation risk.
The fund's launch extends the regulatory and operational foundation established by tokenised money-market products into actively managed strategies, demonstrating that regulated investment vehicles can operate efficiently on blockchain infrastructure while maintaining traditional asset allocation discipline and institutional governance standards. This positioning places Baillie Gifford at the intersection of institutional fixed-income management and tokenised securities distribution, addressing an identified gap between existing tokenised cash management offerings and the demand for professionally managed yield strategies among institutional and high-net-worth investors.
BAGEY is designed as a US dollar-denominated, UK-regulated OEIC (Open-Ended Investment Company) investing in actively managed fixed income. The fund targets approximately 7% yield, operates with a two-year duration profile, and maintains an average credit quality of BBB across its portfolio of government and corporate bonds. The strategy explicitly pursues enhanced yield relative to its benchmark while reducing interest rate sensitivity through short-duration positioning. Critically, BAGEY is available exclusively as a natively issued tokenised fund—a deliberate structural choice that anchors the strategy to distributed ledger infrastructure from inception rather than retrofitting tokenisation to a traditional fund.
Custody and digital asset infrastructure support the fund through four regulated custodians: BNY, Anchorage Digital, Archax, and BitGo Bank & Trust, ensuring institutional-grade safeguarding and settlement capabilities. Baillie Gifford identified three key investor segments: digital-market participants and crypto-native investors (including family offices) already operating onchain; traditional institutional clients testing digital asset exposure, such as defined contribution pension platforms, financial advisory services, and wealth managers; and crypto-native investors seeking professionally managed fixed-income exposure without onchain implementation risk.
The fund's launch extends the regulatory and operational foundation established by tokenised money-market products into actively managed strategies, demonstrating that regulated investment vehicles can operate efficiently on blockchain infrastructure while maintaining traditional asset allocation discipline and institutional governance standards. This positioning places Baillie Gifford at the intersection of institutional fixed-income management and tokenised securities distribution, addressing an identified gap between existing tokenised cash management offerings and the demand for professionally managed yield strategies among institutional and high-net-worth investors.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.