This factsheet covers the Baillie Gifford China Fund's performance and positioning. Over the past year it beat the MSCI China index but lagged its Chinese fund peer group. The managers give no short-term market forecast; they stick to a long-term growth style and stay almost fully invested. Top holdings include Tencent (9.1%, the largest stake), Alibaba (5.3%) and CATL (4.8%). The report also warns about risks such as market suspensions and currency swings, and notes that ratings and contact details are mainly aimed at financial advisers and institutions.
Baillie Gifford China Fund (as of June 30, 2026) has assets of £203.34m, managed by Linda Lin and Sophie Earnshaw, with the objective of outperforming the MSCI China All Shares Index on a rolling five-year basis. The fund employs a long-term growth-oriented bottom-up strategy, holding 61 stocks with
Over the past six months (year-to-date), Class B-Acc returned -0.9%, versus -3.7% for the MSCI China All Shares Index over the same period, an outperformance of +2.8 percentage points; on a rolling one-year basis it returned 19.4%, beating the index (13.3%) by 6.1 percentage points, but lagging the IA China/Greater China peer average (22.1%) by 2.7 percentage points.
| Basis | 6 months | 1 year | 3-year annualized | 5-year annualized |
|---|---|---|---|---|
| Fund (Class B-Acc) | -0.9% | 19.4% | 8.5% | -7.0% |
| MSCI China All Shares Index | -3.7% | 13.3% | 8.7% | -3.1% |
| Excess (Fund − Index) | +2.8pp | +6.1pp | -0.2pp | -3.9pp |
| IA China/Greater China peer average | 2.5% | 22.1% | 9.2% | -3.8% |
On the IA peer ranking, the fund ranks 32/65, 27/64, 29/61, and 44/56 over the 6-month, 1-year, 3-year, and 5-year horizons, respectively: its 5-year rank falls in the lower segment of the peer group.
By annual periods, the past five rolling years:
| Year to June 30 | 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 |
|---|---|---|---|---|---|
| Fund | -25.6% | -26.9% | -10.6% | 19.8% | 19.4% |
| Index | -15.1% | -21.6% | -3.6% | 17.6% | 13.3% |
| Peer average | -17.0% | -23.9% | -6.2% | 13.7% | 22.1% |
The fund lagged the index significantly in three consecutive rolling years from 2021 to 2024, then overtook it from 2024/25 onward; however, it underperformed the peer average by 2.7 percentage points over the most recent year, indicating that the relative advantage of the growth strategy within its peer group is not stable.
[Growth-strategy stance, not a market-timing call] The report gives no directional view from the manager on recent market conditions; the strategic foundation is stated clearly: a five-year holding period, a strong preference for growth, and the pursuit of 'significant upside' for every holding. Stock selection is driven by bottom-up fundamental research from the dedicated China Equities Team, with input from discussions among Baillie Gifford's global investors; the portfolio typically holds 40-80 stocks.
Net exposure clues: cash is only 0.3%, equity positions are almost fully invested, and there are no signs of hedging or defensive de-risking. The above is the fund's official strategy statement, written from the manager's perspective; this month's report does not explain the 3.9-percentage-point annualized underperformance versus the index over the past five years.
The report does not disclose specific buy/sell actions (new positions, adds, trims, or liquidations), but the sector allocation relative to the benchmark clearly shows where the money sits: a significant overweight in growth sectors and a significant underweight in financials.
| Sector | Fund (%) | Index (%) | Difference (pp) |
|---|---|---|---|
| Consumer Discretionary | 20.8 | 14.2 | +6.6 |
| Industrials | 14.1 | 9.5 | +4.6 |
| Communication Services | 13.8 | 11.2 | +2.6 |
| Materials | 10.3 | 7.8 | +2.5 |
| Energy | 2.9 | 3.0 | -0.1 |
| Utilities | 1.9 | 2.3 | -0.5 |
| Consumer Staples | 3.5 | 4.1 | -0.6 |
| Health Care | 2.0 | 4.4 | -2.5 |
| Information Technology | 21.3 | 24.3 | -3.0 |
| Financials | 9.1 | 18.2 | -9.0 |
| Cash | 0.3 | 0.0 | +0.3 |
The largest deviation is the 9.0-percentage-point underweight in financials—the fund compresses financials to half the index weight; overweights are concentrated in consumer discretionary, industrials, communication services, and materials, with a combined overweight of 16.3 percentage points. Information technology, although the largest sector (21.3%), is still 3.0 percentage points below its index weight.
Size £203.34m; managers Linda Lin / Sophie Earnshaw (both Partners); fund established on 19 November 2008. Its objective is to outperform the MSCI China All Shares Index on a rolling five-year annualized basis, in GBP terms, after fees; the manager also considers the IA China/Greater China sector an appropriate comparator benchmark.
Holdings: 61 stocks (guideline range 40-80); active share 66% (relative to the MSCI China All Shares Index); annual turnover 26%, which is low; the top ten holdings together account for 41.0%:
| Holding | % of total assets |
|---|---|
| Tencent | 9.1 |
| Alibaba | 5.3 |
| CATL | 4.8 |
| Shandong Sinocera | 3.9 |
| Ping An Insurance | 3.3 |
| China Merchants Bank | 3.2 |
| NAURA Technology Group | 3.0 |
| Kweichow Moutai | 2.9 |
| Zhongji Innolight | 2.9 |
| China Construction Bank | 2.6 |
Among the top ten, three financial stocks (Ping An Insurance 3.3%, China Merchants Bank 3.2%, and China Construction Bank 2.6%) total 9.1%, exactly equal to the fund's total financial sector position of 9.1%, showing that financial exposure is highly concentrated in these three names.
Fees: Class B-Acc annual management fee 0.72%, OCF 0.78%, historical yield 1.00%; Class B-Inc is also available at the same fee rate. Index benchmark history: MSCI Golden Dragon Index (through 2019-05-02) → MSCI All China Index (through 2019-11-26) → MSCI China All Shares Index.
Risk warning: the fund invests concentratedly in a single market, which may amplify share-price volatility; emerging-market custody carries the risk of losses due to custodian bankruptcy or negligence.
Continuing from the previous analysis of the fund's 'Introduction' section, this installment focuses on four modules: risk warnings, cross-border legal statements, ratings, and contact information. The preceding text has already covered the fund's investment objective, strategy, performance, and fee structure; these will not be repeated here, but merely extended logically.
The three risk warnings that open the follow-up piece superficially resemble those in other fund factsheets, but upon closer reading, the wording embeds a three-layer, carefully designed risk-filtering mechanism.
The original text directly ties "market volatility, political and economic instability" to Chinese companies, and—critically—lists market shutdown（market suspension） as a separate item. This is not boilerplate. Looking back at A-share history, more than 1,400 stocks were suspended in July 2015 (roughly half of all A-shares at the time); after COVID-19 in 2020, the A-share market delayed its reopening; and during the liquidity crisis in early 2024, "thousands of stocks hitting limit-down" occurred once again. Placing "market shutdown" before political and economic instability indicates that the fund manager views this not as a tail risk but as a structural risk characteristic of the Chinese market.
Such statements in the KID (Key Investor Information Document) often correspond to the higher range of the SRRI (Synthetic Risk and Reward Indicator). Given that the Baillie Gifford China Fund typically carries a risk level of 7 (the highest), this passage provides narrative support for that risk rating: the message is not simply "prices will fluctuate" but "the market may lose its trading function."
This sentence is extremely common in UCITS fund marketing documents, but it carries special meaning in the context of a China-themed fund. The Baillie Gifford China Fund invests in the Hong Kong Stock Connect, Chinese ADRs, and related depositary receipts, all of which face a dual pricing mechanism: if the renminbi depreciates, even when stocks rise in local-currency terms, the actual returns for overseas investors (especially holders of sterling share classes) may shrink. From 2022 to 2023, the USD/CNY rate moved from around 6.30 to above 7.35 at one point; for unhedged positions, this was equivalent to an additional loss of more than 10 percentage points for non-USD investors. This risk warning is not a theoretical exercise but a scenario that actually occurred in recent years.
A closer look at the ordering of the three risk paragraphs reveals that they are arranged according to "direct impact channels":
| Statement Order | Risk Type | Impact Channel | Representative Historical Case |
|---|---|---|---|
| First paragraph | Regional systemic risk (market mechanisms, political/legal) | Transmitted via valuation, liquidity, and trading mechanisms | 2015 A-share mass trading suspensions; 2022 Hong Kong liquidity crisis |
| Second paragraph | Currency risk | Directly erodes principal and return conversion | 2022 RMB spot rate fluctuation exceeded 10% |
| Third paragraph | Price volatility risk | Affects redemption decisions through NAV fluctuations | Hang Seng Tech Index 2021–2022 maximum drawdown of approximately 75% |
This ordering places the most unusual risks (market shutdowns, geopolitics) first and the most common, familiar risk (price volatility) last, effectively carrying out a form of "risk expectation management"—before readers delve into the performance data, they have already been pre-anchored to high-risk expectations.
The most notable structural feature in this section is this: why does a Factsheet aimed at UK investors (GBP share class) simultaneously carry legal statements from five countries — Israel, Colombia, Chile, Peru, and Mexico?
This is not an arbitrary geographic choice. As an asset manager with global distribution, Baillie Gifford must ensure that its marketing materials satisfy local securities law requirements in every sales destination. But a careful comparison of the five countries' statements reveals a shared underlying logic: The fund is not registered in any of the five countries and therefore can only be offered through a “private placement exemption” channel to a limited number of qualified investors.
| Country | Regulator | Legal Basis | Registration Status | Restrictions on Offerees | Additional Features |
|---|---|---|---|---|---|
| Israel | Israel Securities Authority (ISA) | Securities Law 1968, First Schedule; Investment Advice Law, First Schedule | Not registered | Must simultaneously satisfy the dual qualification of “Sophisticated Investors” + “Qualified Clients” | The intersection of the two statutes makes access almost impossible for individual investors |
| Colombia | Colombian Financial Superintendency (SFC)* | No specific provision cited; refers to the national registry | Not registered in the National Securities and Issuers Registry | No public offering; investors bear their own compliance responsibility | The statement specifically emphasizes that foreign exchange and tax regulations are borne by investors themselves |
| Chile | Financial Market Commission (CMF) | General Rule NCG 336 | Not registered in the Securities Registry or the Foreign Securities Registry | Private offering; does not constitute investment advice | Cites the specific CMF rule number; the most standardized compliance wording |
| Peru | Superintendence of the Securities Market (SMV) | Refers to the public market registry | Not registered; the document has not been reviewed by SMV | Institutional investors only; other parties should refrain from participating | The harshest wording — “should avoid participating” |
| Mexico | National Banking and Securities Commission (CNBV) | Private placement exemption under Article 8 of the Securities Market Law | Not registered in the National Securities Registry | Qualified and institutional investors only, in the form of a private placement | The legal basis is written into the body of the statement |
*Note: The original text does not identify the Colombian regulator; this is a reasonable inference.
The common core of these five countries' statements is not “permission to sell,” but “acknowledgment of non-registration, restriction of offerees, and demarcation of liability boundaries.” Interestingly, each one emphasizes a different aspect:
From a sales-strategy perspective, the joint appearance of these five countries indicates that the fund is seeking institutional capital in Latin America and the Middle East, but has no intention or plan to conduct a public offering. This contrasts sharply with the fund's registered distribution model in the UK — in the UK itself, the fund is open to retail investors (after all, there is an 0800 freephone number and Intermediary Enquiries); in the five countries above, however, it speaks only with financial institutions.
The Factsheet is marked “30 June 2026,” but the rating data is as of “31 May 2026” — a full one-month lag. This is not a typographical error but a common industry practice: rating agencies need time to process data and write their commentary, and the Factsheet publisher typically takes the latest available rating at the start of the following month. But this means that what a reader sees at the end of June actually reflects the fund’s state as of the end of May, or even earlier. If a major drawdown or management change occurred in June, that rating would not yet reflect it.
| Indicator | Value | Interpretation |
|---|---|---|
| Analyst-Driven % | 100 | The rating is driven entirely by analysts’ subjective judgment, not a purely quantitative model |
| Data Coverage % | 100 | Morningstar’s database provides 100% coverage of the fund’s total holdings |
The combination of these two 100% figures is noteworthy. “Analyst-Driven 100%” means the fund has undergone a complete qualitative assessment by Morningstar’s analyst team — including a comprehensive review of the fund manager, the investment process, and parent company strength — rather than relying purely on quantitative scoring. For a China-themed fund, an analyst-driven rating is particularly scarce, because governance issues and information transparency in Chinese equities require human judgment; a purely quantitative model is prone to distortion.
RSMR is a UK-based fund research firm whose rating system mainly serves IFAs (Independent Financial Advisers). The RSMR “Rated” label indicates that, in the research team’s view, the fund has the potential to consistently outperform its peers. But two details are worth considering:
This statement is a regulatory necessity under FCA rules, which require that ratings must not be equated with investment advice. But on the marketing side, it creates a clear “permission effect”: letting advisers know that the fund has been through review, while still leaving advisers to make their own judgment. The rating agency plays the initial screening role, but shifts final responsibility onto advisers and investors — this is precisely the standard way the “Research Rated” label operates in the UK fund distribution system.
| Contact Channel | Telephone | Target Audience | |
|---|---|---|---|
| Intermediary Enquiries | 0800 917 2113 (UK freephone) | enquiries@bailliegifford.com | Financial advisers, brokers, platforms |
| Institutional Enquiries | +44 (0)131 275 2000 (international) | Institutional.Enquiries@bailliegifford.com | Institutional investors (pension funds, endowments, sovereign wealth funds, etc.) |
Note two details:
First, Intermediary Enquiries offers a UK freephone number, whereas Institutional Enquiries only lists an international paid line. This indicates that the fund does not rely on direct client acquisition in the UK retail market; instead, it reaches individual investors through the intermediary network (IFA platforms) — which corroborates the existence of the RSMR rating. If you are a UK individual investor, you can hardly call Baillie Gifford directly to open an account; you must purchase through an adviser or fund platform (such as Hargreaves Lansdown).
Second, the naming convention of the email addresses — enquiries@ is a general inbox, while Institutional.Enquiries@ points directly to the institutional sales team. This hints at where the fund's real emphasis lies: institutional money. Retail clients access the product through intermediaries, while institutions receive a dedicated sales service team.
“Your call may be recorded for training or monitoring purposes” is likewise a standard clause under UK financial regulation (the FCA requires asset managers to record client communications), but placed at the very end of the document it carries deeper meaning — this is a document that has made extensive use of legal disclaimers, and this final sentence serves as yet another reminder: your behaviour, too, is being monitored. That rounds off the overall tone of the Factsheet: this is not an informational document, but a compliance document.
Taking the full content of this continuation into account, a clearer conclusion can be drawn than from the first half:
The Baillie Gifford China Fund is, in essence, a private-in-disguise public fund targeted at UK and European institutional investors, as well as high-net-worth retail investors reached through intermediary channels. Its high-risk profile in the Chinese market echoes its private-placement sales in five unregistered countries, indicating that the fund manager is actively screening investor types — accepting only capital that understands China risks and possesses the risk tolerance to bear them.
The wording of the risk disclosure section is so specific (trading halts, currency conversion, price volatility) precisely because it is essentially constructing a "disclaimer guardrail" around the performance data on the first few pages of the Factsheet. The presence of rating information, meanwhile, adds a layer of credibility from professional review within the compliance framework. And the five-country compliance statement epitomizes how this established Edinburgh-based asset manager navigates regulatory fragmentation in the era of globalized distribution.
Though modest in page count, this document carries a density of compliance information far exceeding that of ordinary marketing material — it reads more like a legal document with an investment report nested inside. For investors or advisors reading such material, understanding the legal structure behind it is often a more reliable basis for judging whether the fund is worth holding than interpreting the performance figures.