Edison Investment Research Limited
London, UK, 12 December 2023
Edison issues update on Baillie Gifford China Growth Trust (BGCG): China's recovery well worth the wait Baillie Gifford China Growth Trust (BGCG) invests in China, focusing on innovative, rapidly growing companies best positioned to benefit from China's still favourable long-term economic outlook and the structural trends that should drive equity markets for years to come. Key portfolio themes include e-commerce, food delivery, domestic brands, semiconductors, robotics and automation, and renewable energy. The trust's relaunch in September 2020 coincided with a series of challenges for the Chinese economy, investor confidence and the growth companies BGCG favours, so performance has lagged the benchmark. However, the operational performance of most of BGCG's holdings is strong, their prospects are very positive, and the trust's managers believe that it is only a matter of time until confidence returns and share prices more accurately reflect these robust fundamentals.
BGCG's performance since its relaunch has been disappointing. It has declined by 44.0% in NAV terms and 58.2% on a share price basis over the three years to the end of November 2023, compared to the benchmark MSCI China All Share Index's 29.2% fall. Near-term returns have also been poor. However, due to its long-term investment focus, BGCG's managers ask to be judged on performance over five years or more and, on this basis, it is still very early days for the trust. Investors may be reassured by the Chinese authorities' renewed commitment to prosperity and the private sector and by an apparent warming in relations between China and the US.
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1795175 12-Dec-2023
