SecProbe.io

CORRESP
1
filename1.htm

    Christopher Labosky
 T +1 617 235 4732
 F +1 617 235 9475
 christopher.labosky@ropesgray.com

April 20, 2021

VIA
EDGAR

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Attn: Ms. Karen Rossotto

 Re: Post-Effective Amendment Number 53 to the Registration Statement of Baillie Gifford Funds (File Nos. 811-10145
and 333-200831) on Form N-1A filed on February 11, 2021

Dear Ms. Rossotto:

I
am writing on behalf of Baillie Gifford Funds (the “Trust”) to respond to the comments by the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission,” or, the “SEC”) on Post-Effective Amendment No. 53
(the “485(a) Amendment”) to the Registration Statement of the Trust on Form N-1A. The 485(a) Amendment was
filed pursuant to Rule 485(a) under the Securities Act of 1933, as amended (“Securities Act”), on February 11,
2021 to register for public offer and sale the Institutional Class and Class K shares of Baillie Gifford U.S. Discovery
Fund, a new series of the Trust, and in connection with the annual update of the Registration Statement for all but three of the other
series of the Trust (each such series included in the 485(a) Amendment, a “Fund” and, collectively, the “Funds”).
The three series of the Trust excluded from the 485(a) Amendment and the definition of “Funds” in this letter are Baillie
Gifford China Equities Fund (an amendment to the Registration Statement adding this new series was filed on April 8, 2021 and is
scheduled to become effective 75 days after filing pursuant to Rule 485(a)(2) under the Securities Act), Baillie Gifford Multi
Asset Fund (which has a different fiscal year end), and Baillie Gifford International All Cap Fund (shares of which are not registered
for sale under the Securities Act and therefore will update its registration on POS AMI at the end of April 2021).

On March 29, 2021, the
Staff provided comments regarding the 485(a) Amendment by telephone to Ropes & Gray LLP, counsel to the Trust. For convenience
of reference, each comment is summarized before the Trust’s corresponding response. These responses will be reflected, to the extent
applicable, in Post-Effective Amendment No. 55 to the Trust’s Registration Statement, which is expected to be filed effective
May 1, 2021, pursuant to Rule 485(b) under the Securities Act.

    1

Capitalized terms not otherwise defined herein have the
meanings ascribed to them in the Registration Statement.

Prospectus

1.            Comment:
When comments relate to or involve language that is repeated or restated elsewhere in the Registration Statement, please make corresponding
and consistent changes as appropriate throughout the Registration Statement wherever the same issue arises. If the Trust declines to make
conforming changes in a particular instance, please identify and explain the basis for the discrepancies in the response letter to the
Staff.

Response:
The Trust will make corresponding and consistent changes throughout the Registration Statement, as appropriate, where language is repeated
or restated. The Trust will provide an explanation if it declines to make conforming changes in a particular instance.

2.            Comment:
Please confirm that the fee waiver/expense reimbursement agreement referred to in footnote (c) to the table under Fund Summary—Annual
Fund Operating Expenses for Baillie Gifford Asia Ex Japan Fund will extend for at least one year beyond the effective date of the
Registration Statement. If the Fund’s investment adviser may recoup expenses in subsequent years, please describe the recoupment
amount and timeline.

Response:
The Trust confirms that the footnote referenced in the above comment will reflect that the fee waiver/expense reimbursement arrangement
will extend until April 30, 2022, which is at least one year beyond the expected effective date of the Registration Statement as
noted above. The Trust also confirms that the fee waivers/expense reimbursement arrangements for the Fund are not subject to any contractual
recoupment right. Therefore, no disclosure will be made with respect to recoupment rights.

3.            Comment:
The Fund Summary—Principal Investment Strategies section for Baillie Gifford Asia Ex Japan Fund states that the Fund may
invest in preferred stocks, convertible securities and warrants. Please add separate risk disclosure in the Fund Summary—Principal
Risks section of the prospectus relating to investments in preferred stocks, convertible securities and warrants.

Response:
While the Fund maintains the flexibility to invest in preferred stocks, convertible securities and warrants from time to time as part
of its principal investment strategies, the Fund does not believe that additional, separate risk disclosure regarding these instruments
in the Fund summary section is warranted. The Trust respectfully submits that the Equity Securities Risk included in response to Item
9 of Form N-1A discusses in sufficient detail the risks associated with investment in preferred stocks, convertible securities and
warrants. In addition, the Fund’s Statement of Additional Information includes additional disclosure on the features and risks associated
with these instruments. The Trust believes this existing disclosure is appropriate and sufficient, in particular taking into account the
limited nature of the Fund’s intended investments in these instruments and that the Fund’s use of these instruments will normally
be limited and supplemental to its equity investments in common stocks.

Furthermore, the Trust believes that the Fund’s
current summary risk disclosure is consistent with the SEC’s pronouncements in Enhanced Disclosure and New Prospectus Delivery
Option for

    2

Registered Open-End Management Investment Companies, Investment Company Act Release No. 28584 (Jan. 13,
2009), the Staff’s positions taken in the Investment Management Guidance Update 2014-08, public comments of the former Director
of the Division of Investment Management, and the SEC’s recent proposal to update and tailor mutual fund disclosure.1
The Trust believes that this guidance stands for the proposition that the summary section of a prospectus should be succinct, clear and
concise, and that unnecessarily long and duplicative summary sections undermine the usefulness of the disclosure. The Trust believes that
including, in the Fund summary, separate detailed disclosure of the risks associated with preferred stocks, convertible securities and
warrants would overstate the separateness of the Fund’s exposure to these instruments as applied to common stocks and other equity
securities, would make the Fund summary less succinct, clear and concise, and may undermine its usefulness.

4.            Comment:
The Fund Summary—Principal Risks section for Baillie Gifford Asia Ex Japan Fund discusses risks related to investing in equity
securities, including through participatory notes. Please add corresponding disclosure regarding investments in participatory notes in
the Fund Summary—Principal Investment Strategies section for Baillie Gifford Asia Ex Japan Fund.

Response:
The Trust notes that Fund Summary—Principal Investment Strategies section for Baillie Gifford Asia Ex Japan Fund
includes a non-exhaustive list of the Fund’s methods of investing indirectly in equity securities,2
and that participatory notes are but one potential method for the Fund to gain such indirect equity exposure. As the Fund’s
intended use of participatory notes is limited in scope, is conjoined with other equity investments, and does not constitute a principal
investment strategy of the Fund, the Trust does not believe it would be appropriate to further emphasize participatory notes in the Fund
Summary—Principal Investment Strategies section. When a Fund anticipates participatory notes to constitute a significant component
of its investment strategy, such as in the case of Baillie Gifford Emerging Markets Equities Fund, the instrument is explicitly identified
in the Principal Investment Strategy section.

5.            Comment:
The Fund Summary—Principal Investment Strategies section for Baillie Gifford Developed EAFE All Cap Fund states that “[i]n
selecting companies for investment, the portfolio managers focus on issuers in developed markets and generally exclude emerging markets.”
Please clarify what it means for the portfolio managers to “generally exclude emerging markets.”

Response:
The phrase “generally exclude emerging markets” in the above-referenced disclosure is intended to alert shareholders that,
while the Fund focuses its investments almost exclusively on developed economies, there may nonetheless be some holdings based in emerging
markets (in any event subject to the Fund’s investment policy adopted in accordance with Rule 35d-1 of the Investment Company
Act of 1940, as amended (the “1940 Act”)). In order to clarify the

1
Tailored Shareholder Reports, Treatment of Annual Prospectus Updates for Existing Investors, and Improved Fee and Risk
Disclosure for Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements, Investment Company Act
Release No. IC-33963 (August 5, 2020) (“The revisions and additions we are proposing are designed to further improve fund prospectus
risk disclosure by making this disclosure clearer and more specifically tailored to a fund…. The proposed change is designed to
emphasize that principal risk disclosure that appears in the summary prospectus should be concise and succinct, with more detailed risk
information to appear later in the statutory prospectus.”)

2
Specifically, Baillie Gifford Asia Ex Japan Fund’s Fund Summary—Principal Investment Strategies section
states that the Fund “will invest in equity securities either directly or indirectly, such as through depositary receipts.”

    3

disclosure, the Fund will revise the sentence as follows
(new language denoted by underline and deletions by strikethrough):

In
selecting companies for investment, the portfolio managers focus on issuers in developed markets, but in some circumstances may gain
exposure to emerging markets and generally exclude emerging
markets.

6.            Comment:
Please briefly describe China A shares in the Fund Summary—Principal Investment Strategies section for Baillie Gifford Emerging
Markets Equities Fund.

Response:
The Fund will add the following disclosure to the Fund Summary—Principal Investment Strategies section for Baillie Gifford
Emerging Markets Equities Fund in response to the above comment (new language denoted by underline):

The process can result in significant
exposure to a single country or a small number of countries, and the Fund expects to invest significantly in Chinese companies including
through China A shares, which are common stocks and other equity securities that are listed or traded on a Chinese stock exchange and
which are quoted in renminbi.

7.            Comment:
The Fund Summary—Principal Risks section for Baillie Gifford Global Alpha Equities Fund discusses risks related to investing
in China. Please add corresponding disclosure regarding investments in Chinese issuers in the Fund Summary—Principal Investment
Strategies section of the appropriate Funds.

Response:
The Trust notes that the Fund Summary—Principal Investment Strategies section for Baillie Gifford Global Alpha Equities Fund
states that “the Fund invests in companies whose principal activities are in… the Far East,” which is a geographic
region that includes China. The Trust, therefore, does not intend to introduce additional disclosure in response to this comment.

Furthermore,
each Fund that specifically calls out risks of investing in China in its Fund Summary—Principal Risks section is an
international or global fund that is not restricted from investing in issuers located in China. The Trust does not believe that additional
investment strategy disclosure regarding these investments is warranted based on each Fund’s existing disclosure noting its geographic
focus, which is inclusive of China. When a non-China-focused Fund expects investments in issuers located in China to be a more significant
part of its strategy, such as is the case for Baillie Gifford Emerging Markets Equities Fund, Baillie Gifford International Concentrated
Growth Equities Fund and Baillie Gifford Long Term Global Growth Fund, China is explicitly identified in the Fund Summary—Principal
Investment Strategies section and reflected with particularity in the list of principal risks for that Fund. In response to this comment,
the Trust has reviewed each Fund’s principal risks and principal investment strategies sections and adjusted the relevant country-specific
disclosure where appropriate.

8.            Comment:
For each Fund that discusses frontier markets risk in its Fund Summary—Principal Risks section, please add corresponding
disclosure to the Fund’s Fund Summary—Principal Investment Strategies section.

    4

Response:
The Trust notes that only Baillie Gifford Asia Ex Japan Fund, Baillie Gifford Emerging Markets Equities Fund, and Baillie Gifford Positive
Change Equities Fund discuss frontier markets risk in their Fund Summary—Principal Risks sections and that each aforementioned
Fund currently references frontier markets in its Fund Summary—Principal Investment Strategies section. Therefore, the Trust
respectfully declines to include additional disclosure in response to this comment.

9.            Comment:
The Fund Summary—Principal Investment Strategies section for Baillie Gifford Global Stewardship Equities Fund states that
the Fund considers environmental, social, and/or governance (“ESG”) factors. Please enhance the disclosure regarding how the
Fund considers ESG factors and specifically describe the type of ESG considerations, data, and analyses Baillie Gifford Overseas Limited
(the “Manager”) uses when making investment decisions. If ESG considerations are not part of the Fund’s principal investment
strategies, then please relocate the ESG-related disclosure to the Additional Information About Principal Strategies and Risks—Principal
Investment Strategies section.

Response:
In response to this comment, the Fund will repeat the following disclosure—which is currently in its Item 9 disclosure—in
its Fund Summary—Principal Investment Strategies section (responsive to Item 4) further clarifying the Manager’s ESG
review process:

In incorporating stewardship in its
investment process, the portfolio management team also performs an ESG analysis on companies considered for inclusion in the Fund’s
portfolio. This analysis is supported by bespoke research conducted by analysts from members of the Manager’s dedicated Governance
and Sustainability team using a range of different information sources. The ESG analysis is reviewed by the portfolio managers as part
of the discussion of the broader investment case for each current and potential portfolio holding.

10.         Comment:
Please add disclosure to the Fund Summary—Principal Investment Strategies section for Baillie Gifford Global Stewardship
Equities Fund describing how the Fund incorporates stewardship considerations into its investment decisions.

Response:
In response to this comment, the Fund will adapt disclosure from its Item 9 section as follows for inclusion in to its Fund Summary—Principal
Investment Strategies section responsive to Item 4, further clarifying the stewardship factors considered during the review process:

In
selecting investments for the Fund, the portfolio management team conducts a stewardship analysis, which focuses on a number of different
aspects relating to the control, oversight and management of a company. As long-term investors, the portfolio management team takes particular
interest in the following areas of a company’s business: (i) its capital structure, articles of incorporation, and the
country or countries of incorporation and listing, (ii) the t