Edinburgh-based asset management giant Baillie Gifford has made a landmark move into onchain finance, unveiling the Baillie Gifford Enhanced Yield Fund (BAGEY) on the Ethereum and Solana blockchains. The 118-year-old firm partnered with global custodian BNY and NatWest Trustee and Depositary Services to launch the actively managed fixed-income product, which targets a yield of approximately 7% and is denominated in U.S. dollars.
Unlike many tokenized fund experiments that simply wrap an existing traditional product, BAGEY is "a fund issued onchain, with the blockchain serving as the register of record," said Theo Golden, head of digital assets and tokenization at Baillie Gifford. "Investors hold the fund directly: direct ownership, direct recourse." This structure places ownership records directly on public ledgers, bypassing the typical layers of transfer agents and custodians that maintain records in conventional fund operations.
The fund operates through a U.K.-regulated Open-Ended Investment Company (OEIC) and invests in a short-duration portfolio of public corporate bonds. Access is restricted to eligible investors in the United Kingdom, Switzerland, and the Cayman Islands, reflecting the careful navigation of securities laws that tokenized products must undergo. BNY provides tokenization and wallet infrastructure, while NatWest acts as depositary, ensuring traditional safeguards around investor protection and asset custody remain in place.
Katey Neate, global head of investor solutions at BNY, emphasized that "tokenisation has moved from concept to real-world application, and this launch shows how regulated fund structures can evolve to meet the needs of a more digital, connected marketplace." The use of two major public blockchains — Ethereum and Solana — signals a departure from earlier projects that relied on private or permissioned networks, potentially increasing interoperability but also requiring robust compliance controls for eligibility and transfers.
The launch is a significant step in the broader trend of traditional finance embracing blockchain for real-world asset tokenization. Fixed-income products, with their heavy reliance on settlement, custody, and transfer records, are seen as an ideal use case. While adoption is expected to be gradual due to jurisdictional and regulatory constraints, Baillie Gifford's move underscores how deeply tokenization is becoming embedded in regulated market infrastructure.
