The fund aims to outperform the ICE BofA Sterling NonGilt over 10 Years index by 0.5% per annum over rolling three-year periods and has primarily been used by defined benefit pension schemes to access long-dated assets.
A spokesperson for Baillie Gifford said that as these schemes have matured, investors have sold out of the fund, leading to a decrease in its AUM.
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According to data from FE fundinfo, the fund held close to £200m and hit almost £250m in early 2021, but since then the AUM has continuously fallen, bar a short spike in late 2022.
"In light of the fact the managers see limited potential for meaningful future inflows, Baillie Gifford has decided it is in the best interests of the shareholders to close the fund," the firm said.
The fund will officially close on 6 December and will suspend trading on 29 November.
The fund's manager, Paul Dilworth, runs the firm's Investment Grade Bond fund and co-heads Sterling Aggregate Bond alongside Philip Annen and Stuart Kelly.
The spokesperson said Dilworth "remains a valuable member of the bond funds ICVC team".