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Baillie Gifford launches UK s first fully tokenised fund
At a glance
- •Baillie Gifford launched the Enhanced Yield Fund as the UKs first fully native tokenised fund.
- •The fund is dollar-denominated and will invest in short-term corporate and government securities.
- •Tokens will be issued on Ethereum and Solana, with an expected yield of about 7% for eligible investors.
- •BNY Mellon provides core infrastructure, reflecting institutional support for tokenised fund structures.
- •The launch follows FCA guidance aimed at encouraging fund tokenisation and broader regulatory acceptance of digital assets.
Baillie Gifford launches the UKs first fully native tokenised fund
Baillie Gifford has launched what it says is the United Kingdoms first fully tokenised investment fund, offering savers a blockchain-based route into short-dated bonds. The Edinburgh-based investment house unveiled its dollar-denominated Enhanced Yield Fund on Tuesday. The mandate will actively manage investors' money across a range of short-term corporate and government securities.
Unlike earlier tokenised products that simply wrapped existing vehicles, Baillie Gifford describes this fund as fully native to the blockchain and regulated in the UK. The product follows fresh guidance from the Financial Conduct Authority, published last autumn, which set out a framework to support asset managers issuing tokenised funds. The FCA argues tokenisation could broaden access for younger savers and improve operational efficiency for funds.
Theo Golden, Baillie Giffords head of digital assets, said the initiative aims to deliver infrastructure they can trust, stressing that tokenisation must make finance materially better rather than merely providing a digital wrapper around existing systems.
The fund will use two public blockchainsEthereum and Solanato issue and settle tokens. Baillie Gifford expects the product to offer a yield of approximately 7 percent to eligible investors in the UK, Switzerland and the Cayman Islands. Much of the operational infrastructure for the launch will be provided by Bank of New York Mellon, whose head of investor solutions, Katie Neate, framed the rollout as a real-world example of how regulated fund structures can evolve to use blockchain-enabled infrastructure.
Supporters of tokenisation say the technology can reduce administrative costs and speed up settlement by enabling instant clearing of trades. The move comes amid a broader regulatory push in the UK to embrace digital assets after criticism that the country was falling behind global peers. The FCA has recently relaxed certain rulessuch as lifting a ban on crypto tracker fundsand the Bank of England has eased some proposed rules for stablecoins.
Baillie Giffords entry into tokenised funds represents a new chapter for the 118-year-old firm, well known for its large technology bets. The group has been an early backer of companies such as Amazon and is a notable investor through its trusts in SpaceX, Anthropic and other high-growth technology names. The Enhanced Yield Fund positions Baillie Gifford at the forefront of blending traditional fixed income strategies with blockchain distribution and settlement technology.
Market participants will be watching whether Baillie Giffords approach proves a blueprint for other UK managers considering tokenisation, and whether the promised efficiencies and investor access materialise in practice.
