Longtime China bull Scottish Mortgage Investment Trust—managed by Baillie Gifford and operating as the UK’s largest investment trust with £17.75 billion ($23.55 billion) in total assets—has more than halved its allocation to Chinese equities over the past six years.
Key Financial Metrics & Strategic Shift:
Portfolio Reallocation: Cut China portfolio exposure from 24% at the end of 2020 down to 11% as of September, reflecting heightened geopolitical and regulatory risk factors.
Core Drivers: Rebalance driven by U.S. capital investment restrictions on Chinese firms, domestic regulatory shifts in China, and weak performance in domestic indices (with the benchmark CSI 300 touching one-year lows).
High-Conviction Holdings Retained: Remains selectively bullish on leading Chinese tech, EV, and green-tech pioneers, maintaining long-term positions in BYD, CATL, and ByteDance.
Structural Outlook: Baillie Gifford’s China equities team emphasized that maintaining strategic exposure remains critical as China continues setting the pace in robotics, advanced manufacturing, battery tech, and AI innovation.
A major institutional rebalancing highlighting how global asset managers are navigating geopolitical friction while retaining exposure to China’s core tech innovators!
