US Equity Growth Quarterly Update

BAILLIE GIFFORD

30 June 2021

Contents 02 Executive Summary Baillie Gifford Investment Management (Europe) Limited 03 Commentary is a wholly owned subsidiary of Baillie Gifford Overseas Limited, which is wholly owned by Baillie Gifford & Co. 06 Performance Persons resident or domiciled outwith the UK should 12 Portfolio Overview consult with their professional advisers as to whether they require any governmental or other consents in order to enable 13 Governance Summary them to invest, and with their tax advisers for advice relevant to 17 Governance Engagement their own particular circumstances. This document contains information on investments which 19 Voting does not constitute independent research. Accordingly, it is not 22 Transaction Notes subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments 23 Legal Notices concerned. All information is based on a representative portfolio, new client portfolios may not mirror the representative portfolio This document is solely for the use of professional exactly. As at 30 June 2021, in US dollars and sourced from investors and should not be relied upon by any other Baillie Gifford & Co unless otherwise stated. person. It is not intended for use by retail clients. Canada Important Information and Risk Factors Baillie Gifford International LLC is wholly owned by Baillie Baillie Gifford Overseas Limited provides investment Gifford Overseas Limited; it was formed in Delaware in 2005 management and advisory services to non-UK and is registered with the SEC. It is the legal entity through Professional/Institutional clients only. Baillie Gifford Overseas which Baillie Gifford Overseas Limited provides client service Limited is wholly owned by Baillie Gifford & Co. Baillie and marketing functions in North America. Baillie Gifford Gifford & Co and Baillie Gifford Overseas Limited are Overseas Limited is registered with the SEC in the United authorised and regulated by the Financial Conduct Authority. States of America. Baillie Gifford Asia (Hong Kong) Limited The Manager is not resident in Canada, its head office and 柏基亞洲(香港)有限公司 is wholly owned by Baillie Gifford principal place of business is in Edinburgh, Scotland. Baillie Overseas Limited and holds a Type 1 and Type 2 licence from Gifford Overseas Limited is regulated in Canada as a portfolio the Securities & Futures Commission of Hong Kong to market manager and exempt market dealer with the Ontario Securities and distribute Baillie Gifford’s range of collective investment Commission ('OSC'). Its portfolio manager licence is currently schemes to professional investors in Hong Kong. Baillie passported into Alberta, Quebec, Saskatchewan, Manitoba and Gifford Asia (Hong Kong) Limited 柏基亞洲(香港)有限公司 Newfoundland & Labrador whereas the exempt market dealer can be contacted at Suites 2713-2715, Two International licence is passported across all Canadian provinces and Finance Centre, 8 Finance Street, Central, Hong Kong, territories. Baillie Gifford International LLC is regulated by the Telephone +852 3756 5700. OSC as an exempt market and its licence is passported across Baillie Gifford Investment Management (Europe) Limited all Canadian provinces and territories. Baillie Gifford provides investment management and advisory services to Investment Management (Europe) Limited (‘BGE’) relies on European (excluding UK) clients. It was incorporated in the International Investment Fund Manager Exemption in the Ireland in May 2018 and is authorised by the Central Bank of provinces of Ontario and Quebec. Ireland. Through its MiFID passport, it has established Baillie Gifford Investment Management (Europe) Limited (Frankfurt South Africa Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in Baillie Gifford Overseas Limited is registered as a Foreign Germany. Similarly, it has established Baillie Gifford Financial Services Provider with the Financial Sector Conduct Investment Management (Europe) Limited (Amsterdam Authority in South Africa. Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in Japan The Netherlands. Baillie Gifford Investment Management (Europe) Limited Mitsubishi UFJ Baillie Gifford Asset Management Limited also has a representative office in Zurich, Switzerland pursuant (‘MUBGAM’) is a joint venture company between Mitsubishi to Art. 58 of the Federal Act on Financial Institutions UFJ Trust & Banking Corporation and Baillie Gifford ("FinIA"). It does not constitute a branch and therefore does Overseas Limited. MUBGAM is authorised and regulated by not have authority to commit Baillie Gifford Investment the Financial Conduct Authority. Management (Europe) Limited. It is the intention to ask for the authorisation by the Swiss Financial Market Supervisory South Korea Authority (FINMA) to maintain this representative office of a foreign asset manager of collective assets in Switzerland Baillie Gifford Overseas Limited is licensed with the Financial pursuant to the applicable transitional provisions of FinIA. Services Commission in South Korea as a cross border Calton Square, 1 Greenside Row, Edinburgh EH1 3AN Telephone +44 (0)131 275 2000 bailliegifford.com Copyright © Baillie Gifford & Co 2009. Ref: 53315 INS QR 0257

Discretionary Investment Manager and Non-Discretionary Israel Investment Adviser. Baillie Gifford Overseas is not licensed under Israel’s Australia Regulation of Investment Advising, Investment Marketing and Portfolio Management Law, 5755-1995 (the Advice Law) and Baillie Gifford Overseas Limited (ARBN 118 567 178) is does not carry insurance pursuant to the Advice Law. This registered as a foreign company under the Corporations Act document is only intended for those categories of Israeli 2001 (Cth) and holds Foreign Australian Financial Services residents who are qualified clients listed on the First Licence No 528911. This material is provided to you on the Addendum to the Advice Law. basis that you are a “wholesale client” within the meaning of section 761G of the Corporations Act 2001 (Cth) (“Corporations Act”). Please advise Baillie Gifford Overseas Limited immediately if you are not a wholesale client. In no Past Performance circumstances may this document be made available to a “retail client” within the meaning of section 761G of the Corporations Past performance is not a guide to future returns. Changes in Act. This material contains general information only. It does investment strategies, contributions or withdrawals may not take into account any person’s objectives, financial materially alter the performance and results of the portfolio. situation or needs. Potential for Profit and Loss Qatar All investment strategies have the potential for profit and loss. The materials contained herein are not intended to constitute an Stock Examples offer or provision of investment management, investment and advisory services or other financial services under the laws of Any stock examples, or images, used in this paper are not Qatar. The services have not been and will not be authorised by intended to represent recommendations to buy or sell, neither is the Qatar Financial Markets Authority, the Qatar Financial it implied that they will prove profitable in the future. It is not Centre Regulatory Authority or the Qatar Central Bank in known whether they will feature in any future portfolio accordance with their regulations or any other regulations in produced by us. Any individual examples will represent only a Qatar. small part of the overall portfolio and are inserted purely to help illustrate our investment style. A full list of portfolio Oman holdings is available on request. Baillie Gifford Overseas Limited (“BGO”) neither has a registered business presence nor a representative office in Oman and does not undertake banking business or provide financial services in Oman. Consequently, BGO is not regulated by either the Central Bank of Oman or Oman’s Capital Market Authority. No authorization, licence or approval has been received from the Capital Market Authority of Oman or any other regulatory authority in Oman, to provide such advice or service within Oman. BGO does not solicit business in Oman and does not market, offer, sell or distribute any financial or investment products or services in Oman and no subscription to any securities, products or financial services may or will be consummated within Oman. The recipient of this document represents that it is a financial institution or a sophisticated investor (as described in Article 139 of the Executive Regulations of the Capital Market Law) and that its officers/employees have such experience in business and financial matters that they are capable of evaluating the merits and risks of investments.

Product Overview US Equity Growth is a long-term, concentrated, regional equity strategy investing in exceptional growth business in the USA. These businesses are owned for long enough that the advantages of their business models and strength of their cultures become the dominant drivers of their stock prices.

Risk Analysis

Key Statistics Number of Holdings 46 Typical Number of Holdings 30-50 Active Share 92%* Annual Turnover 28%

*Relative to S&P 500. Source: Baillie Gifford & Co, S&P.

We have achieved exceptional returns since we started managing the strategy in 1997 by focussing on investing in rapidly growing businesses, irrespective of the market environment We cannot be the world's best holders and sellers of companies. Hold discipline can be a greater edge than sell discipline as market returns are driven by a few exceptional companies Companies with unique cultures can be particularly challenging to hold but can also present us with tremendous opportunities. We believe we are entering a new era of Cultural Outliers

Baillie Gifford Key Facts Assets under management and advice US$486.8bn Number of clients 730 Number of employees 1488 Number of investment professionals 300

Commentary 03

The last quarter…of a century On average the top quintile by earnings growth outperforms by approximately seven per cent per annum We have been managing our US Equity strategy and has outperformed over every five-year period. since 1997 which means we are now in our 25th year. Exceptional businesses run by talented individuals adapt, Pleasingly, £1,000 invested at the inception of the many display anti-fragility: their business models and strategy is now worth £21,570 net of fees: £1,000 competitive advantages strengthen during the most invested in the S&P 500 would now be worth £8,320. challenging environments. And they need our support The gain our most patient clients have enjoyed is £13,250 if investment is to add value to society. over and above the index for every hard-earned thousand pounds they have entrusted to our care*. Hold discipline Our long-term growth style has felt out of tune with market sentiment for most of this year, and returns have been volatile. One of the many things that we have learnt “We don’t have a sell discipline” over the past quarter of a century (nearly) is that this is Helen Xiong, Baillie Gifford Partner, Global Alpha Portfolio Manager inevitable. We must not overreact, or the next 25 years will not reap the same rewards for our clients as the previous. US market pundits currently obsess about inflation, Focusing relentlessly on capturing those long-term returns rising bond yields, China’s relationship with the US, and isn’t easy. Human nature tends towards pessimism. If we whether growth or value is in the ascendency. It isn’t that delve back into our evolution as a species it was at times none of these matters, but there is little value in adding to essential for our survival. We are cursed with the capacity the voluminous chatter. Investment is challenging enough to imagine, and tend to overestimate the likelihood of without losing focus, or pretending we are wide-ranging worst-case scenarios, particularly when managing our experts. We aren’t. Our skill lies in finding exceptional, finances. It is also the most damaging trait for an equity rapidly growing businesses and owning them for a manager, where market and portfolio returns are driven sufficiently long-time period that their fundamental by remarkably few exceptional companies. progress drives their share price. Helen’s response to our most frequently asked client question then proceeds to describe our ‘hold discipline’. 120 It is an attempt to redress the balance, to highlight the need for optimism, a long-term mindset and creativity 100 in our approach to analysing and investing in businesses.

80 We cannot be both the world’s best holders and sellers of companies. The nature of equity returns means it is in our 60 clients’ interest to relentlessly strive for the former. 40 year total return (%) The importance of hold discipline is evidenced by the - returns of the portfolio’s holdings. The top 10 holdings 20 (Shopify, Amazon, Wayfair, The Trade Desk, Roku,

Median 5 0 Moderna, Tesla, Twilio, Zoom and Netflix) constitute just under 50 per cent of the portfolio. As long-term -20 Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 holders of these businesses it has been a rollercoaster ride (largest EPS (smallest EPS in share price terms, but ultimately a very successful one. 5Y Growth) 5Y Growth) All of them have experienced a drawdown of greater than

20 per

Quintiles of EPS 5-Year Growth from May 2000 to May 2020 cent since we invested. In total we’ve experienced 40

Source: Baillie Gifford & Co, Factset. Based on a representative portfolio. drawdowns of greater than 20 per cent, an average maximum drawdown of 49 per cent for each company, and a maximum peak to trough hit of 86 per cent The good news is that searching for exceptional (Wayfair) in holding these outstanding investments. companies is always the right thing to do on a long-term The average total return since we invested is 677 per horizon. Irrespective of the starting point, market cent across the top 10, with Tesla topping the list with a direction or market environment, companies that deliver 1,249 per cent in return*. high earnings or revenue growth, on a five-year view, outperform. The graph above shows the five-year return by five-year earnings growth quintile since May 2000.

*Based on US Equity Growth Composite. As at 31 May 2021, sterling.

Commentary 04

So, how have we held our nerve as each of these large and ever-expanding market opportunity, which highly successful holdings halves in value, as most of is unlocked and driven by the perspective of the them have at some point? We stick to our process. In founder/management team. This is not about unlocking addition to a full research note and a stock discussion, we a new market with the same product. It is revolution not write a forward-looking hypothesis (FLH) and unlocking evolution. Cultural outlier business models enable them questions for each company. The FLH states our to strategically outcompete, but their purpose is not expectations for the company, why we hold it, and how constrained within their current opportunity set. we expect the company to deliver at least our 2.5 times Company culture is the glue that holds all this together. over five years return hurdle. It is this return hurdle The challenge in owning these businesses is they which conditions our valuation and hold discipline. We frequently surprise us, or infrequently surprise us in a will only continue to hold a company if we believe it can dramatic way. They will make major strategic decisions deliver a 2.5 times return over the next five years with a which initially make us feel uncomfortable and challenge significantly greater than average (20 per cent) us from an analytical standpoint. We cannot predict how probability. Investment research on portfolio holdings is these companies will pivot, but identifying their a continuous process, we expect our understanding to exceptionality helps us prepare for the surprises and evolve over time. The unlocking questions set out what encourages us to back management to execute on plans we want to find out in future; the answers will either that may take a decade to come to fruition. The potential increase or erode our confidence in the long-term to surprise becomes part of the FLH. investment case. We are learning from experience. Amazon’s move It is almost as challenging to hold on when share into AWS or Alphabet’s acquisition of YouTube were prices rise significantly, rather than taking profits. If we difficult to analyse and hard to appreciate at the time. don’t guard against it, it can feel undisciplined, and it A cultural outlier is the difference between a hybrid certainly becomes an increasing focus of client and an electric car. In the 2000s you could choose to discussions. We will do so if the FLH is intact and we make a hybrid or electric car. A hybrid is an evolution, it believe the future return hurdle is achievable. With can harness existing skillsets and infrastructure and does exceptional returns in 2020, we reviewed our positions not require huge habit change from the end consumer. with far greater regularity than is typical. Portfolio Electric vehicles are a revolution, a completely different turnover rose to 25 per cent, compared to our usual knowledge base (battery chemistry, car design and 15–20 per cent, and we exited or significantly reduced software), new inputs, (eg lithium) many of which are not some long-standing positions as the competition for readily available off the shelf, and new infrastructure capital in the portfolio remains intense. There is currently such as charging points and servicing. And you must shift no shortage of opportunity for investors seeking consumer behaviour, helping people overcome range innovative, disruptive businesses. The broad theme in our anxiety and learn about charging. trading over the past 12 months has been a switch to We believe we are at the beginning of a new age of earlier stage companies as the most innovative companies the cultural outliers. As a society we have built up a of the past decade mature. We sold out of Alphabet and toolkit over the past few decades; the internet, the rise of Facebook, and reduced Amazon. We trimmed Tesla five software, the explosion of data, the decreasing cost of times as the share price started to catch up with our computing power, the rise of machine learning and AI, ongoing enthusiasm for its ability to transform two of the and unlocking the power of the genome. This is enabling largest industries: automotive and energy. what historically could only be the realm of imagination or science fiction to become a reality. In every field, the Cultural outliers technological lever is getting longer and longer, enabling the application of the above tools to an increasing number If we are to continuously improve, we must get better at of industries. This revolution creates winner-takes-most the parts of our process and philosophy which enable us dynamics across a widening array of industries. to deliver the returns our clients need. This begs the Cultural outliers look to reshape entire industries question, how do we become better holders? based on a completely different paradigm. We have We have been working on identifying a sub-set of identified six such companies within the portfolio: companies within the portfolio which can be particularly Affirm, CoStar, Lemonade, Shopify, Twilio and Tesla. challenging to hold for long periods of time. We define It’s a fascinating sub-group of the portfolio with the these companies as ‘cultural outliers’. It is their potential to transform industries as large and well uniqueness which creates the challenges and the vast established as payments, real estate, insurance, opportunity. A cultural outlier is a company addressing a ecommerce, communications, automotive and energy.

Commentary 05

We will learn a lot from the exceptional founders and management teams of these companies as they evolve, improving our understanding of these industries, and the nature of technology driven disruption. We must be even more patient than usual in ownership as transformation is never easy. The potential for a few innovative businesses to drive progress as well as stock market returns has perhaps never been greater. The only certainties are that there will be surprises along the way, and that hold discipline, rather than sell discipline, is how we as investors can contribute meaningfully to solving societies greatest challenges. Helpfully it also provides the best chance for us to repeat the investment success our clients have come to expect over the past quarter of a century.

The views expressed reflect the personal opinion of the author and should not be considered as advice or a recommendation to buy, sell or hold a particular investment.

Performance - US Dollar 06

Performance Objective 2%+ p.a. above benchmark over 5 years.

The performance objective stated is in no way guaranteed. The performance target is aspirational and is not used for the purpose of determining or constraining the composition of the portfolio. Performance may vary between segregated accounts and pooled funds in different jurisdictions as each structure will bear a different set of costs. A single performance target may not be appropriate for all vehicles in all jurisdictions and for this reason our portfolio specific materials will often refer to ‘material’ outperformance of a benchmark.

Periodic Performance

Composite Net (%) Benchmark (%) Difference (%) 3 Months* 15.5 8.5 6.9 YTD* 14.4 15.3 -0.8 1 Year* 79.8 40.8 39.0 3 Years 42.9 18.7 24.2 5 Years 39.6 17.6 22.0 10 Years 24.3 14.8 9.5 15 Years 17.2 10.7 6.4 20 Years 14.3 8.6 5.6 Since Inception 13.7 8.8 4.9

Annualised periods ended 30 June 2021. *Not annualised. Inception date: 31 August 1997. Figures may not sum due to rounding. Benchmark is S&P 500. Source: StatPro, S&P. US dollars

Discrete Performance

30/06/16- 30/06/17- 30/06/18- 30/06/19- 30/06/20- 30/06/17 30/06/18 30/06/19 30/06/20 30/06/21 Composite Net (%) 29.0 41.0 8.3 49.9 79.8 Benchmark (%) 17.9 14.4 10.4 7.5 40.8

Benchmark is S&P 500. Source: StatPro, S&P. US dollars

Performance - Euro 07

Performance Objective 2%+ p.a. above benchmark over 5 years.

Periodic Performance

Composite Net (%) Benchmark (%) Difference (%) 3 Months* 14.5 7.6 6.9 YTD* 18.1 18.9 -0.8 1 Year* 70.3 33.3 37.0 3 Years 42.2 18.1 24.1 5 Years 37.8 16.1 21.7 10 Years 26.8 17.2 9.7 15 Years 17.8 11.3 6.5 20 Years 12.3 6.8 5.5 Since Inception 13.3 8.4 4.9

Annualised periods ended 30 June 2021. *Not annualised. Inception date: 31 August 1997. Figures may not sum due to rounding. Benchmark is S&P 500. Source: StatPro, S&P. euro

Discrete Performance

30/06/16- 30/06/17- 30/06/18- 30/06/19- 30/06/20- 30/06/17 30/06/18 30/06/19 30/06/20 30/06/21 Composite Net (%) 25.7 37.7 11.0 52.0 70.3 Benchmark (%) 14.8 11.7 13.2 9.0 33.3

Benchmark is S&P 500. Source: StatPro, S&P. euro

Performance - Sterling 08

Performance Objective 2%+ p.a. above benchmark over 5 years.

Periodic Performance

Composite Net (%) Benchmark (%) Difference (%) 3 Months* 15.4 8.4 6.9 YTD* 13.2 14.0 -0.8 1 Year* 60.8 25.9 34.9 3 Years 40.8 16.9 23.9 5 Years 38.7 16.9 21.9 10 Years 26.2 16.6 9.6 15 Years 19.5 12.9 6.6 20 Years 14.4 8.7 5.6 Since Inception 14.5 9.5 4.9

Annualised periods ended 30 June 2021. *Not annualised. Inception date: 31 August 1997. Figures may not sum due to rounding. Benchmark is S&P 500. Source: StatPro, S&P. sterling

Discrete Performance

30/06/16- 30/06/17- 30/06/18- 30/06/19- 30/06/20- 30/06/17 30/06/18 30/06/19 30/06/20 30/06/21 Composite Net (%) 32.8 38.7 12.3 54.4 60.8 Benchmark (%) 21.3 12.5 14.5 10.7 25.9

Benchmark is S&P 500. Source: StatPro, S&P. sterling

Performance - Canadian Dollar 09

Performance Objective 2%+ p.a. above benchmark over 5 years.

Periodic Performance

Composite Net (%) Benchmark (%) Difference (%) 3 Months* 13.8 6.9 6.8 YTD* 11.2 12.0 -0.8 1 Year* 63.5 28.0 35.5 3 Years 40.1 16.3 23.8 5 Years 38.3 16.5 21.8 10 Years 27.4 17.7 9.7 15 Years 18.0 11.5 6.5 20 Years 13.1 7.5 5.6 Since Inception 13.2 8.3 4.9

Annualised periods ended 30 June 2021. *Not annualised. Inception date: 31 August 1997. Figures may not sum due to rounding. Benchmark is S&P 500. Source: StatPro, S&P. Canadian dollars

Discrete Performance

30/06/16- 30/06/17- 30/06/18- 30/06/19- 30/06/20- 30/06/17 30/06/18 30/06/19 30/06/20 30/06/21 Composite Net (%) 29.0 42.8 7.6 56.3 63.5 Benchmark (%) 17.9 15.8 9.7 12.1 28.0

Benchmark is S&P 500. Source: StatPro, S&P. Canadian dollars

Performance – Australian Dollar 10

Performance Objective 2%+ p.a. above benchmark over 5 years.

Periodic Performance

Composite Net (%) Benchmark (%) Difference (%) 3 Months* 17.2 10.1 7.0 YTD* 17.6 18.5 -0.8 1 Year* 64.9 29.1 35.8 3 Years 42.2 18.0 24.1 5 Years 39.4 17.5 22.0 10 Years 28.8 19.0 9.8 15 Years 17.1 10.7 6.4 20 Years 12.0 6.5 5.5 Since Inception 13.6 8.7 4.9

Annualised periods ended 30 June 2021. *Not annualised. Inception date: 31 August 1997. Figures may not sum due to rounding. Benchmark is S&P 500. Source: StatPro, S&P. Australian dollars

Discrete Performance

30/06/16- 30/06/17- 30/06/18- 30/06/19- 30/06/20- 30/06/17 30/06/18 30/06/19 30/06/20 30/06/21 Composite Net (%) 25.2 46.4 14.0 52.8 64.9 Benchmark (%) 14.4 18.7 16.3 9.6 29.1

Benchmark is S&P 500. Source: StatPro, S&P. Australian dollars

Performance – Attribution 11

Stock Level Attribution Top and Bottom Ten Contributors to Relative Performance

Quarter to June 30, 2021 One Year to June 30, 2021 Stock Name Contribution (%) Stock Name Contribution (%) Moderna 1.9 Tesla Inc 12.0 Shopify 1.7 Roku 3.3 Roku 1.2 Moderna 2.6 Novocure 1.0 Novocure 1.9 Cloudflare 0.6 The Trade Desk 1.6 Zoom 0.4 Appian Corp 1.3 Denali Therapeutics 0.4 Cloudflare 1.2 The Trade Desk 0.4 Wayfair 1.1 Illumina 0.4 Shopify 1.0 Twilio 0.3 Denali Therapeutics 1.0

Wayfair -0.4 MarketAxess -0.8 Microsoft -0.3 Vroom -0.7 Chegg -0.3 Teladoc -0.6 Chewy -0.3 Netflix -0.5 Redfin -0.3 Apple -0.5 MarketAxess -0.3 Chegg -0.4 Sana Biotechnology -0.3 Alphabet -0.3 Teladoc -0.2 Illumina -0.3 Tesla Inc -0.2 CoStar Group -0.3 Workday -0.2 Alnylam Pharmaceuticals -0.2

Source: StatPro, S&P. US Equities composite relative to S&P 500. Some stocks may have only been held for part of the period.

Portfolio Overview 12

Top Ten Holdings Stock Name Description of Business % of Portfolio Shopify Cloud-based commerce platform provider 8.5 Amazon.com Online retail and computing infrastructure 5.9 Wayfair Online household goods retailer 5.4 The Trade Desk Advertising technology company 4.9 Roku Digital media player manufacturer 4.9 Moderna A clinical stage biotechnology company 4.4 Tesla Inc Electric vehicles, autonomous driving and solar energy 4.1 Twilio Communication platform as a Service 4.0 Zoom Video Communications Remote conferencing service provider 3.4 Netflix Subscription service for TV shows and movies 3.1 Total 48.6

Sector Weights (%) 6 1 Information Technology 31.0 5 2 Consumer Discretionary 25.5 1 3 Health Care 20.2 4 4 Communication Services 11.6 5 Financials 5.5 6 Industrials 4.1 7 Real Estate 1.8 8 Cash 0.5

Figures may not sum due to rounding.

Governance Summary 13

Voting Activity Votes Cast in Favour Votes Cast Against Votes Abstained/Withheld Companies 37 Companies 5 Companies 1 Resolutions 282 Resolutions 11 Resolutions 3

In 1948, the United Nations Universal Declaration of Human Rights was the first rights declaration that explicitly applied to everyone, regardless of race, gender, economic circumstance and beliefs. It is as relevant as ever today We engage with our holdings on business and human rights issues, encouraging management teams to understand the growing expectations on their businesses and support the protection of human rights within their sphere of influence A lot of work is discretely going into improving human rights standards across international business and supply chains, much taking place under initiatives such as the UN Global Compact, to which we are a long-standing signatory

Company Engagement Engagement Type Company Corporate Governance Cloudflare, Inc. Environmental/Social NVIDIA Corporation, Shopify Inc., The Trade Desk, Inc., Wayfair Inc. AGM or EGM Proposals Penumbra, Inc.

Notes on company engagements highlighted in blue can be found in this report. Notes on other company engagements are available on request.

Governance Summary 14

Rights, responsibilities and sustainable returns Many centuries later, the adoption of the Universal Declaration of Human Rights by the United Nations The oldest known bill of rights is thought by many General Assembly on 10 December 1948 was the final historians to be the Cyrus Cylinder. Following the act in one of the most remarkable achievements in human conquest of the City of Babylon by the armies of Cyrus history. Out of the ashes of the second world war, an the Great, the first king of ancient Persia, Cyrus international committee headed by the charismatic and apparently freed the slaves, declared that all people had dynamic former US First Lady Eleanor Roosevelt and the right to choose their own religion and established Vice Chair PC Chang of China managed to draft a racial equality. These and other decrees were recorded on ‘universal bill of rights’ that was endorsed by almost a baked-clay cylinder in the Akkadian language with every country in the world (there were a small number of cuneiform script. abstentions). Recognising this ancient object, now residing in the Before then, there had been a number of hugely British Museum, as the world’s first charter of human significant milestones towards universal rights such as rights, the script has been translated into all official the Magna Carta (1215), the French Declaration of the languages of the United Nations and its provisions Rights of Man and of the Citizen (1789), and the US Bill parallel the first four Articles of the 1948 Universal of Rights (1791), but there had never before been a Declaration of Human Rights. declaration of rights that explicitly applied to everyone, regardless of race, gender, economic circumstance and beliefs.

Members of the United Nations Commission on Human Rights rehearsing in the Delegates Lounge for a television show You and Human Rights. Left to right are: Professor Rene Cassin, France; Dr PC Chang, China; Quincy Howe, CBS (Columbia Broadcasting Service), moderator; Mrs Eleanor Roosevelt, US, Commission Chairman; Dr Charles Malik, Lebanon, and Mr E Kelen of UN Radio Division. © United Nations. https://www.flickr.com/photos/un_photo/37464345502/in/album-72157677599327615/

Governance Summary 15

Despite being over 70-years-old today, the Universal From this relatively recent, tentative start, human Declaration is still the foundation for all international rights awareness, and many accompanying dilemmas, are human rights law, and the fundamental rights that it sets now everywhere in business, not least because of the role out are as relevant as ever. One of the reasons for the of social media and increasing NGO and employee Declaration’s ongoing significance and longevity is the activism in holding companies to account. The resulting principle of ‘universalism’ that runs through the reputational risk from the mishandling of human rights document. At the insistence of Vice Chair PC Chang, the issues is ensuring that the ‘s in esg’ – social – is rapidly Chinese diplomat, philosopher and playwright whose reaching parity with the environmental (‘e’) and membership of the drafting committee was of pivotal governance (‘g’) issues in terms of commercial importance, there was no direct mention of any specific importance. Whether this is considered by all to be religion with respect to the principles, only freedom of appropriate or not, many businesses have learned the hard religion as a right. This ensured that the principles in the way that stakeholder expectations have changed beyond Declaration were articulated as natural, inalienable rights all recognition from the Milton Friedman thesis that the that could not be arbitrarily revoked by monarchs, clerics sole responsibility of the corporation was to make money or politicians. for shareholders. While this brief history of rights is of innate academic In the past few years alone, Rio Tinto’s Chief interest, human rights is a topic of rapidly growing Executive Jean-Sébastien Jacques was forced to resign currency and importance in investment management and after a number of aboriginal cultural sites were destroyed the wider business community. during the company’s mining operations; numerous Until relatively recently, the responsibility for fashion companies have been publicly named and shamed protecting human rights fell on sovereign states, for allegedly having forced labour in their supply chains; supported by a number of international agencies and non- companies providing products or services linked to governmental organisations (NGO). However following detention centres in the US and China have found several high profile incidents in the latter 20th century, themselves in the cross-hairs of campaign groups around not least the perceived lack of intervention by oil and the world; and corporations have been accused of being gas companies during the trial and execution of Nigerian tacitly ‘part of the problem’ in the lack of progress in community activist and environmental protestor improving the human rights and economic empowerment Ken Saro-Wiwa in 1995, the United Nations became of black, minority and first nation citizens in a number of increasingly interested in the role that businesses could countries. play in supporting the protection of human rights. This While many people tend to think of issues as modern culminated in human rights being specifically included in slavery and discrimination against minority groups when the United Nations Global Compact, launched in 2000 as they think of human rights in the economy, there are also a framework for socially responsible business operations, a range of evolving areas where different conceptions of embodied in the first two of 10 principles: employee and consumer rights are coming to the fore. “Businesses should support and respect the protection These include the right to digital privacy, gender and of internationally proclaimed human rights (Principle identity rights in the workplace and the right to safer One); and businesses should make sure that they are not working conditions for all, the latter starkly highlighted complicit in human rights abuses (Principle Two)”. by some of the inequalities of the pandemic. Human rights are also increasingly relevant to discussions on the This was followed up by the much more detailed best way to ‘net-zero’ emissions, taking account of issues United Nations Guiding Principles on Business and such as the economic rights of workers in the fossil fuel Human Rights, endorsed in 2011. More recently, many industry during a ‘just transition’ and the right to businesses have also recognised the role that they can protection from the adverse physical impacts of climate play in supporting the achievement of the UN Sustainable change. Technology platforms are also grappling with the Development Goals, particularly with respect to basic at times competing rights of free speech on one hand and universal needs such as primary healthcare, nutrition and a content stewardship duty of care towards protected sanitation. characteristics groups and vulnerable users online.

Governance Summary 16

For all of the above reasons, we are engaging with our holdings on business and human rights issues, supported by additional research in this area being undertaken by the Baillie Gifford Governance and Sustainability Team and a newly established Investment Human Rights Research Group. We encourage all management teams to understand the growing expectations on their business to understand their obligations and support the protection of human rights within their sphere of influence. Our experience to date is that the ambitious, innovative and growth-oriented kinds of companies that we aim to hold typically have no interest whatsoever in being even remotely connected to human rights abuses, and are often passionate to do what they can to support progress in this area. While it can be hard (and at times counter-productive) to take bold public positions in highly sensitive areas, very considerable amounts of thought and commitment are discretely going into improving human rights standards across international business and supply chains, much of this taking place under the auspices of invaluable initiatives such as the UN Global Compact, to which we are a long-standing signatory. Human rights are at their most difficult and contentious when countries at different stages of development place differing emphasis on the trade-offs between individual rights and collective national security or economic development goals. Investors and companies alike are nevertheless still expected to be positive advocates for human rights in these circumstances, or at the very least not complicit in abuses, even though most rightly understand the limitations of their sphere of influence and the very significant risks from missteps in this arena. For our part, we will report back on our work in this critically important and rapidly evolving area in our client and regular investment stewardship reporting.

Governance Engagement 17

Company Engagement Report Cloudflare, Inc. Our meeting with co-founder and CEO Matthew Prince provided an opportunity to learn more about Cloudflare's corporate culture. For Prince, culture is essential for long-term growth. In order to build an enduring technology company, he believes Cloudflare's culture must promote relentless curiosity. Additionally, he believes that employees must also be principled, proactive and transparent. For example, Cloudflare has built a substantial public policy team to examine regulatory and/or governance hurdles that it might face in future, despite not having encountered any major issues as yet. With regards to recruitment, Prince and co-founder Michelle Zatlyn still spend a substantial amount of time in final interviews to ensure that all employees feel that senior management is accessible to them, thereby reducing friction to ideas within the company. We continue to learn about Cloudflare's culture and what it may mean for company behaviour and growth prospects. NVIDIA Corporation We met with Colette Kress, CFO, and Tonie Hansen, Senior Director for CSR and Sustainability, to explore NVIDIA's climate aspirations and commitments. Kress' participation in this sustainability-focused meeting was both unexpected and impressive and speaks to the importance of environmental considerations to the company. She emphasised that the overriding aim of NVIDIA's climate approach is to improve the energy efficiency of its Graphics Processing Units (GPUs) and data centres. One of the key questions for NVIDIA is whether it can access enough 'green' components over the next decade to satisfy the demands of its increasingly climate-aware customer base and whether this could become a point of competitive edge and/or premium pricing. Looking to the future, NVIDIA currently sources 25 per cent of its electricity needs from renewables and would like to increase this proportion to 65 per cent by 2025. Management is keen to increase reporting coverage of value chain emissions, with expansion across upstream manufacturing and downstream product use/disposal as a priority for this year. The company also recognises the need to engage with its own suppliers and customers for better data so that in future it can set a wider value chain net-zero target. As NVIDIA gathers more scope three data, we will seek to examine how it develops its targets and will monitor the additional supplier engagement that it promotes. We recognise that while the company's suppliers provide it with data on energy, waste and water use, the quality and extent of such data is inadequate. This will be a key area for NVIDIA to influence and improve upon. In addition, we intend to monitor NVIDIA's planned work in relation to waste management and end-of-life recycling/re-use. Shopify Inc. We spoke with Shopify, including Stacey Kauk director of the company's Sustainability Fund, to learn more about the approach to positive climate influence across the ecommerce value chain. Shopify reports its direct emissions and runs both its own and cloud-related activities on 100 per cent renewable power. Just as importantly, it is a direct investor in carbon reduction and removal innovators. This creates a deep knowledge of the offsetting market which it then, in turn, puts at the disposal of Shopify-enabled merchants that wish to offer offsets to their customers. We also discussed the company's interactions with logistics operators and carriers, where Shopify is exploring ways to accelerate its offer of lower-carbon warehousing and distribution. The company also acknowledged that it may be able to deploy the deep dataset it is gathering on ecommerce purchases to further educate and empower consumers on product carbon footprints. Shopify displays a strong pro-climate narrative in its communications, and we look forward to seeing how this continues to develop into direct action for decarbonisation.

Governance Engagement 18

Company Engagement Report The Trade Desk, Inc. We met with founder and CEO Jeff Green to delve into the data privacy challenges and opportunities facing The Trade Desk's advertising business. As 'walled gardens' (e.g. Google and Apple) with troves of first-party data move to eliminate third-party cookies from their browsers and operating systems (on the premise of enhanced user privacy), the concern facing The Trade Desk is that the open internet will be starved of some of the data that facilitates the company's targeted advertising business. In response, the company has launched a nascent alternative to third-party cookies that not only enhances data privacy and control for users, but also supports targeted advertising for the benefit of the entire digital advertising industry and the millions of small publishers who have business models based on advertising. The Trade Desk's Unified ID 2.0 initiative is based on entirely anonymised email addresses (meaning it cannot be controlled by any browser), works across all channels (desktop, mobile, streaming TV), and increases user convenience and control. Crucially, The Trade Desk has open-sourced the initiative and it will be operated by a consortium of partners so that no individual company has control over user data. This is because its ambition is to benefit the internet as a whole - ad-tech competitors, publishers, advertisers, users, and regulators alike. We are encouraged by The Trade Desk's adaptability and ability to thoughtfully engage with multiple stakeholders, while also expanding its growth opportunities. Wayfair Inc. We met with the CEO and CFO of Wayfair to discuss business development, but also for an update on progress with the company's thinking and strategy around environmental sustainability. Connecting thousands of furniture and homeware suppliers to customers in Europe and the Americas, Wayfair has the opportunity to share best practice, develop information for consumers and influence the logistics providers. We discussed the company's findings on the level of inherent interest in these topics across the value chain. European customers and global logistics are most advanced, with Wayfair seeing more work to be done to educate buyers in the Americas and convince sellers that progress can be made without a long-term burden on margins. This is an evolving area of focus, and we will keep in touch with the company as efforts progress.

Voting 19

Votes Cast in Favour Company Meeting Details Resolution(s) Voting Rationale Amazon.com Annual 13 We supported a shareholder proposal to improve 05/26/21 the transparency of Amazon's corporate lobbying policies and governance. We believe greater transparency of all political expenditures and lobbying, particularly indirect spending through trade associations, coalitions and charities, would enable shareholders to assess alignment with Amazon's values and corporate goals. Amazon.com Annual 6 We supported a shareholder proposal for Amazon 05/26/21 to report on the median gender and racial pay gap across the business. We believe this proposal requests data which will be useful in understanding Amazon's efforts to promote equality and inclusion in the business. Netflix Inc Annual 4 We supported a shareholder resolution for a report 06/03/21 on political contributions as we believe enhanced disclosure on the company's policies and procedures is in shareholders' best interests. Redfin Annual 4 We supported a shareholder proposal relating to 06/09/21 the introduction of a simple majority voting standard for director elections. Zillow Group Inc Class A Annual 4 We supported an annual vote on executive 06/08/21 compensation due to our concerns regarding the repricing provision within the equity incentive plan. Companies Voting Rationale Alnylam Pharmaceuticals, Amazon.com, Appian Corp, We voted in favour of routine proposals at the aforementioned Carvana, Chegg, Cloudflare Inc, CoStar Group, Datadog, meeting(s). Denali Therapeutics, Doordash Inc, Eventbrite Inc Class A, First Republic Bank, Glaukos Corp, Illumina, Lemonade Inc, Lyft Inc, MarketAxess Holdings, Mastercard, Moderna Inc, NVIDIA, Netflix Inc, Novocure Ltd, Penumbra Inc, Pinterest, Redfin, Roku, Shopify 'A', Teladoc, The Trade Desk, Twilio Inc, Vroom Inc, Watsco Inc, Wayfair Inc, Workday Inc, Yext Inc, Zillow Group Inc Class A, Zoom

Votes Cast Against Company Meeting Details Resolution(s) Voting Rationale Amazon.com Annual 10 We opposed a shareholder resolution requesting 05/26/21 an alternative director candidate policy as we think it is overly prescriptive and believe the nominating and governance committee is best placed to manage this process. Amazon.com Annual 12 We opposed a shareholder resolution requesting a 05/26/21 reduction in the threshold for call special meetings as we think the current provision is appropriate. Amazon.com Annual 5 We opposed a shareholder resolution requiring an 05/26/21 independent chair. We believe the current Chair, Jeff Bezos, is a responsible, long-term steward of the business. We also believe the SID Jonathan Rubenstein provides appropriate balance to the current joint CEO/Chair set-up.

Voting 20

Company Meeting Details Resolution(s) Voting Rationale Amazon.com Annual 7 We opposed a shareholder resolution requesting a 05/26/21 report on promotion data as we do not believe it is necessary. Amazon.com Annual 8 We opposed a shareholder resolution requesting a 05/26/21 report on packaging materials as we think the company is performing well in this area and don't think additional disclosure is required. Amazon.com Annual 9 We opposed a shareholder resolution requesting a 05/26/21 diversity and equity report as we believe the company has made good progress in this area over the past year and we will continue to engage with them on this topic. CoStar Group Annual 6 We opposed a shareholder resolution to amend the 06/02/21 voting threshold for amendments to company by- laws as we do not believe that this change is required. Lyft Inc Annual 4 We opposed a shareholder resolution requesting 06/17/21 further disclosure on lobbying expenditures as we seek to better understand the company's position and encourage improvements through engagement. Netflix Inc Annual 5 We opposed a shareholder resolution to eliminate 06/03/21 supermajority voting as we are satisfied the company's current governance provisions are appropriate. Netflix Inc Annual 6 We opposed a shareholder resolution to make 06/03/21 changes to the executive compensation program as we are unconvinced that the adoption of this proposal would benefit shareholders. Zillow Group Inc Class A Annual 3 We opposed the executive compensation 06/08/21 resolution due to the inclusion of a repricing provision within the equity incentive plan which has the potential to misalign the experience of management and shareholders.

Votes Abstained Company Meeting Details Resolution(s) Voting Rationale Amazon.com Annual 11 We abstained on a shareholder resolution 05/26/21 requesting a report on anti-competitive practices as we are unclear as to what additional information the company can provide and intend to engage with them on this topic. Amazon.com Annual 14 We abstained on a shareholder resolution 05/26/21 requesting a report on customer use of certain technologies. The company has made progress in this area over the past year, and we intend to continue our dialogue with them. Amazon.com Annual 4 We abstained on a shareholder resolution 05/26/21 requesting a report on customer due diligence. The company has responded to concerns in this area and we are continuing to engagement with them on it.

Voting 21

Votes Withheld

We did not withhold on any resolutions during the period.

Transaction Notes 22

New Purchases Stock Name Transaction Rationale 10X Genomics Inc Class A 10x Genomics develops instruments and consumables for the analysis of single cells. When combined with next generation sequencing, 10x Genomics' tools enable researchers to measure and interpret differences between individual cells in a sample. Compared to traditional bulk sequencing, single cell analysis provides a more granular view of biology and advances our understanding of health and disease. We believe that the growth opportunity is attractive as more researchers incorporate single cell analysis into their workflow to help them find new discoveries. Longer term, single cell analysis could be used in the pharmaceutical and clinical markets. We believe that 10x Genomics is well-positioned to take advantage of this growth opportunity due to its technological edge and very fast pace of innovation. We are impressed by the management team who are clearly driven by a mission to improve human health and place strong emphasis on the firm's culture and their customers. We are excited by the long-term prospects for 10x Genomics and have decided to take a holding. Recursion Pharmaceuticals Recursion is building a new model for drug discovery, driven by machine learning and Inc experimental biology on an unprecedented scale. Its approach aims to move beyond the constraints of human logic to make advances in areas of biology where our understanding of the targets and pathways involved in a disease is incomplete. The company aspires to build a high- resolution digital map of human cellular biology that could predict biological and chemical relationships in healthy and diseased cells. With improving prediction ability, Recursion has the opportunity to develop drugs faster, more successfully and at lower costs. Importantly, its long- term ambitions to transform existing processes extend beyond the lab to clinical development and manufacturing. It aims to apply its technology to create virtuous cycles of data generation, analysis and prediction. We have been impressed with the company's progress over the past 3 years since we first got to know the founder. Recursion has strengthened its management team, increased the scope and pace of its research engine and put four drugs into clinical trials. We have therefore decided to participate in the IPO and take a holding for the portfolio.

Complete Sales Stock Name Transaction Rationale Eventbrite Inc Class A Eventbrite's ticketing business has been under extreme pressure as live events have been cancelled due to Covid. It was forced to undertake an emergency capital raise as a result. The business is now starting to recover and the shares have rebounded as investors are anticipating continued progress with lockdown easing. Our view is that the company's ambitions have reduced significantly after this traumatic experience and it is less likely to deliver the type of long term returns we are looking for. Mastercard We recently sold the global payments and credit card company, Mastercard, due to declining conviction that it can meet our return criteria over the long-term. Whilst its global footprint is impressive, competition has intensified challenging their traditional credit card model, which seems outdated by modern standards. We have seen a number of companies enter the payments market with novel technology leading us to believe that the competitive moat around Mastercard is not what it once was. Competition for capital in the portfolio is high so we decided to allocate it to companies where we have a stronger belief in the long-term growth potential. Yext Inc Yext helps businesses synchronise information across a range of online services. We purchased the shares because we were intrigued by the company's opportunity to use its technology to better manage a host of data on behalf of global brands, such as store opening hours or promotions which a consumer could see or hear through websites or voice assistants. However, growth in this area has been stalled for some time now, leaving us reliant on the success of the company's other initiatives. Further analysis, combined with engagement with the Yext management team, have led us to question whether these newer business lines are sufficiently differentiated to be successful. Combined with significant employee turnover at the company, this has lowered our confidence in the investment case and we have sold.

Legal Notices 23

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