Baillie Gifford China Growth (BGCG)

Baillie Gifford China Growth Trust (BGCG) has made the most of China’s revival. Its growth-oriented portfolio captured the recovery from late 2024 well, delivering a NAV total return of 35.1% over the three years to 05/11/2026, almost fifteen percentage points ahead of the MSCI China All Shares Index.

The past year has been tougher as spotlights were on Taiwan and Korea semiconductors, and domestic property and consumer worries resurfaced. Whilst this saw BGCG’s NAV fall 8.9%, it still finished ahead of the index’s 14.7% decline (see Performance), with much of the credit going to the private book. ByteDance and RedNote, performed well, revalued upwards by 27% and 37%, respectively, reflecting strong operating progress. ByteDance was also the strongest contributor to returns over the year, helped by the agreement over TikTok’s US operations removing a long-standing regulatory overhang.

Amid the volatility, managers Sophie Earnshaw and Linda Lin have been busy, with the Portfolio’s annual turnover rising to 24%, compared with 8–20% a year over the previous five years, as valuation dispersion widened across the market. They bought AI chip designers Cambricon Technologies and Hygon Information Technology, topped up de-rated consumer names such as Meituan and PDD, and broadened the portfolio’s return drivers through PetroChina and Air China.

Whilst capital growth remains the priority, BGCG’s income rose meaningfully over its FY2026, supporting the board’s decision to increase the total Dividend for the year by 14%. This reflects a gradual shift in corporate China, with many companies striking a better balance between reinvestment and shareholder returns, alongside supportive policymakers. At the time of writing, BGCG trades on a 10.1% Discount, wider than its five-year average of 9.5%. The board has been active with buybacks, and the trust is on track to avoid triggering its 2028 conditional tender offer.