Baillie Gifford China Growth Trust - Economic transition driving growth opportunities

Baillie Gifford China Growth Trust (BGCG) focuses on innovative, growing Chinese companies with exposure to the massive opportunities generated by China’s vast market, its positive long-term economic outlook and its transition to a more diversified, innovation-led growth model. BGCG’s performance has lagged the declining market over recent years, despite the strong operational performance of most of its portfolio holdings. But the Chinese New Year heralded an improvement in market sentiment and, in recent months, BGCG has made outright gains and outperformed the market. In the three months to end-June 2024, the trust returned 3.3% in NAV terms, compared to a benchmark return of 0.4%. Its managers are cautiously optimistic about the prospects for the economy and the trust, and they have been taking advantage of still low valuations to enhance exposure to China’s best high-growth companies across a range of industries.