Key Takeaways:
- Baillie Gifford launched BAGEY, a tokenized bond fund on Ethereum and Solana.
- The fund targets a 7% yield through short-duration public corporate bonds.
- BNY provides tokenization infrastructure; minimum investment is $100.
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Baillie Gifford launches 7% tokenized bond fund on Solana and Ethereum
Baillie Gifford, the 118-year-old Edinburgh-based investment manager, launched the Baillie Gifford Enhanced Yield Fund (BAGEY) on Ethereum and Solana in partnership with BNY, marking the first publicly available UK-regulated fund issued natively onchain.
The fund is not a token wrapped around existing infrastructure but a fully native onchain vehicle, with the blockchain serving as the official register of ownership, according to a statement Monday.
"The Baillie Gifford Enhanced Yield Fund is not a token placed on top of a fund. It is a fund issued onchain, with the blockchain serving as the register of record. Investors hold the fund directly: direct ownership, direct recourse," Theo Golden, head of digital assets and tokenisation at Baillie Gifford, said.
BAGEY is structured as a UK-regulated Open-Ended Investment Company (OEIC) and offers eligible investors access to an actively managed portfolio of short-duration public corporate bonds. The fund currently targets a yield of about 7%, carries a two-year duration and holds an average credit quality rating of BBB, according to the firm.
Investors can mint and redeem fund tokens using USDC or fiat currency, with a minimum investment of $100 and daily dealing alongside a daily net asset value calculation. The fund is available to eligible investors in the UK, Switzerland and the Cayman Islands, subject to applicable regulations.
BNY will provide tokenization and wallet infrastructure for the fund, while NatWest Trustee and Depositary Services will act as the fund's depositary.
"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," Katey Neate, global head of investor solutions at BNY, said.
The launch reflects a broader push by traditional financial institutions into blockchain-based asset issuance. Tokenization of real-world assets on public blockchains has drawn interest from major asset managers seeking to modernize fund distribution, settlement and ownership tracking. Unlike private-permissioned ledger experiments, Baillie Gifford's use of Ethereum and Solana gives the fund compatibility with the growing ecosystem of onchain financial applications, stablecoins and decentralized protocols.
Stuart Dunbar, partner at Baillie Gifford, said tokenization is "not a short term theme for us, but an integral evolution in how financial products may be built, distributed and used over time."
The move positions Baillie Gifford alongside a growing list of traditional finance firms exploring tokenized funds. BlackRock's BUIDL fund, launched on Ethereum in 2024, has accumulated over $500 million in assets under management, while Franklin Templeton's BENJI tokenized money market fund operates on multiple chains including Stellar and Polygon. BAGEY's use of Solana alongside Ethereum distinguishes it from most existing tokenized fund products, which have largely been confined to Ethereum and its layer-2 networks.
This article is for informational purposes only and does not constitute investment advice.
