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Baillie Gifford China underperforms against benchmark in half-year

3rd Oct 2023 14:33

(Alliance News) - Baillie Gifford China Growth Trust PLC on Tuesday reported that its net asset value total return underperformed against its benchmark in the six months to July 31, citing a lacklustre property sector in China.

The company that aims for long-term capital growth by investing in Chinese companies said NAV per share as at July 31 fell 19% to 265.66 pence from 328.87p at January 31.

NAV total return was negative 18.7%, underperforming against its benchmark, the MSCI China All Shares Index in sterling terms, which had a negative return of 11.0%.

"While growth in the property sector is likely to remain lacklustre, we think the risk of financial instability is low. Indeed, we believe a consumption-led recovery is gradually taking shape and that the government's support for the private sector is likely to accelerate this somewhat. Geopolitical concerns may remain a headwind to sentiment, but there are signs that both sides want to stabilise the relationship," Baillie Gifford China said.

Looking ahead, the company expects prospects for China to be "much brighter," citing "bottom-up active stock pickers" and the country offering large and growing structural opportunities.

Baillie Gifford China shares were 2.2% lower at 209.21 pence each on Tuesday afternoon in London.

By Tom Budszus, Alliance News reporter

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