Baillie Gifford launches £286B tokenised fund

• Baillie Gifford launched BAGEY, which it describes as the UK's first fully tokenised investment fund operating entirely on blockchain infrastructure.
• The fund invests in short-term corporate bonds and targets a yield of around 7% for qualified investors.
• The launch expands the use of blockchain technology in regulated investment products following updated UK regulatory guidance.

Baillie Gifford launched the Enhanced Yield Fund under the ticker BAGEY, introducing a fully tokenised investment fund backed by an actively managed portfolio of short-term corporate bonds.

The fund manager, which oversees approximately £286 billion in assets, said the product operates entirely on blockchain infrastructure rather than using blockchain as a secondary record-keeping layer.

“Unlike most tokenised funds, BAGEY will run entirely onchain, meaning investors hold the fund directly, with the chain doing the legal bookkeeping rather than just mirroring it,” said Baillie Gifford Head of Digital Assets and Tokenisation Theo Golden.

BNY will provide tokenisation and wallet infrastructure for the fund, while NatWest Trustee and Depositary Services will perform depositary functions for the UK-regulated Open-Ended Investment Company.

Baillie Gifford said the fund targets a yield of around 7% and is available to qualified investors in the UK, Switzerland and the Cayman Islands, and following the announcement the BAGEY token price was unavailable.

The launch follows regulatory changes by the UK's Financial Conduct Authority, which confirmed in April that asset managers can use public distributed ledger networks for fund registers if appropriate controls are maintained.

Separate tokens using the BAGEY ticker subsequently appeared on Solana (CRYPTO:SOL) and Ethereum (CRYPTO:ETH), although the Solana-based token has no verified connection to Baillie Gifford's regulated investment fund.

At the time of reporting, Solana price was $70.85.