Investment manager Baillie Gifford has debuted the Enhanced Yield Fund, a UK-regulated vehicle that eschews traditional wrappers in favor of direct, onchain issuance. By utilizing public blockchains as the legal record of ownership, the fund seeks to bring transparency and continuous settlement to institutional fixed-income portfolios.
The new fund, denominated in dollars, provides eligible investors exposure to a short-duration portfolio of corporate bonds. Unlike legacy products that merely digitize existing structures, this fund is built natively on Ethereum and Solana. The architecture ensures that tokens function as the primary legal evidence of ownership, allowing for programmatic transfers and direct recourse for holders.
Currently, the portfolio targets a yield of approximately 7 percent, maintaining a two-year duration and a BBB average credit quality. Baillie Gifford developed the infrastructure alongside BNY, which provides the necessary wallet and tokenization support. NatWest Trustee and Depositary Services Limited serves as the depositary for the project.
Theo Golden, head of digital assets at Baillie Gifford, emphasized that the firm prioritized functional improvements—such as faster settlement and cleaner governance—over simple novelty. The product is accessible to professional investors in the UK, Switzerland, and the Cayman Islands, with a minimum entry threshold of $100. Participants may mint or redeem tokens using either fiat currency or stablecoins, marking a shift toward integrating traditional bond market liquidity with programmable financial rails.
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