The £200 million Baillie Gifford China Growth Trust plc investment trust said its net asset value total return was 34% and share price total return was 38.8% in the year to March 31, 2026, compared with a total return of 22.2% for the MSCI China All Shares Index.
The outperformance of the fund was driven by strong contributions from several of its highest conviction holdings. Key contributors were ByteDance, Zijin Mining Group, Pop Mart and Zhongji Innolight. Detractors were Meituan, DPC Dash and Sunny Optical Technology.
The fund is proposing a final dividend of 2.50p per share, an increase of 14%.
The fund’s 10 biggest holdings at January 31 were Tencent, ByteDance, Alibaba, Ping An Insurance, CATL, Zijin Mining Group, Kweichow Moutai, China Merchants Bank, China Construction Bank Corporation and Weichai Power.
The fund’s chair Nicholas Pink wrote: “The board believe that Baillie Gifford China Growth Trust has a unique investment strategy.
“There is no other open or closed end equity fund offering a China growth style, investment in unlisted companies, prudent gearing, a competitive cost and a commitment to discount management via a buyback and a 100% performance related Conditional Tender Offer (CTO).
“The financial year to 31 January 2026 was a period where all the components of the company strategy contributed to deliver very strong performance for shareholders. The strong performance over the past year therefore builds on the recovery in the company’s performance, which started in 2024.
“Whilst Baillie Gifford’s long-term investment time horizon is five to ten years, it remains encouraging that the manager has continued to outperform when conditions for growth investing have been more favourable.
“In the past year the board has remained focussed on enhancing shareholder value including scrutiny of the company’s strategy and investment performance, monitoring the prevailing discount at which the shares trade, and undertaking share buybacks (2.9% in financial year to 31 January 2026), renewal of the loan facility and the marketing of the company.”
The fund’s managers Linda Lin and Sophie Earnshaw wrote: “Portfolio activity throughout the year was purposeful rather than frequent. We used market dislocations to refine the portfolio – adding where we saw durable compounding at attractive prices and exiting where the growth outlook, risk profile or valuation asymmetry became less compelling.
“New holdings included a mix of structural growers and diversifiers: MiniMax (AI), Anta Sports Products, Atour, H World (consumer/services), Didi (mobility), Wanhua Chemical, China Yangtze Power (quality infrastructure/clean power), and selected resources exposure including Tianqi Lithium, Ganfeng Lithium, and Zijin Gold International.
“We also continued to evolve our approach to private companies. During the year we added a second private holding, RedNote (Little Red Book), alongside ByteDance. The Company’s investment policy permits investment in unlisted securities up to 20% of gross asset value at the time of investment, and our allocation to private companies remains within this limit.
“RedNote is a consumer internet franchise at the intersection of social discovery and commerce: users come for trusted recommendations and content-led discovery, and merchants come for highly targeted demand generation. Our investment followed a long period of monitoring and repeated engagement with management, reflecting the additional diligence required for private investments, where we focus heavily on governance, incentives, competitive positioning and the durability of monetisation.
“Sales/exits included Li Ning, Proya, Ke Holdings, Robam Appliances, Shanxi Fen Wine, Yonyou, and others where our conviction reduced or where risk/reward became less favourable …
“For the Company, our focus in 2026 remains unchanged. We aim to own a concentrated portfolio of exceptional Chinese growth companies, remain disciplined on valuation and risk, and look beyond near-term volatility.
“The past year reinforced that patience, selectivity and long-term conviction matter in China. While challenges remain, the lessons of 2025 leave us cautiously optimistic that the balance of risks and rewards continues to improve for long‑term growth investors.”