Liontrust China Fund 

Q1 2025 review
Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment. 
  • Chinese equities rose +11.6% in Q1 2025, driven by economic stabilisation, AI optimism (e.g. DeepSeek), and government stimulus.
  • China’s economy grew 5.4%, supported by pre-tariff exports and a recovering property market; fiscal deficit target raised to 4% with increased social spending.
  • Tech, consumer discretionary, and healthcare sectors gained 16–20%, while energy and utilities fell. Fund performance boosted by financials and consumer discretionary holdings.

The Liontrust China Fund returned 9.8%* over the quarter, versus the IA China/Greater China sector average of 5.6% and 11.6% from the MSCI China Index (both comparator benchmarks).

Following a very strong rally through the second half of 2024, Chinese equities continued to perform well during the first quarter despite the sharply higher volatility in global equity markets that came with the inauguration of Donald Trump for his second term as US President and considerable policy uncertainty. Chinese equities rose by +11.6%, well ahead of both emerging markets (-0.1%) and developed markets (-1.8%). The rally was supported by economic stabilisation, government stimulus, and optimism around AI and tech innovation (notably DeepSeek).

China’s economy grew by 5.4% during the first quarter, likely helped by a pre-tariff rush as exporters accelerated shipments ahead of new US tariffs. However, following the stimulus measures announced last year, China’s real estate market is showing signs of recovery with existing home transaction value growing again in many cities. While property may no longer be a key driver of growth going forwards, removing the negative contribution to growth can still provide a meaningful boost to the economy. During the March National People’s Congress, China announced a fiscal deficit target of 4%, the highest in recent years, signalling increased government spending to support the economy. Policies included healthcare, pensions, and incentives to encourage higher birth rates, aiming to stimulate domestic consumption. Positive government signals toward the tech sector and new stimulus measures helped lift investor sentiment. AI and high-tech industries were key drivers of market optimism, challenging US tech dominance in some areas.

The dispersion in sector returns was again high, with the consumer discretionary, technology and healthcare sectors generating positive returns of +20%, +17% and +16%, respectively, while energy and utilities fell by 7-8%. Key positive contributions came from our holdings in the financials and consumer discretionary sectors, offset by weakness in communication services.

Discrete years' performance (%) to previous quarter-end:

 

Mar-25

Mar-24

Mar-23

Mar-22

Mar-21

Liontrust China C Acc GBP

28.9%

-21.9%

-6.0%

-27.0%

36.8%

MSCI China

37.5%

-18.8%

-1.4%

-29.3%

29.1%

IA China/Greater China

20.8%

-20.7%

-3.6%

-21.5%

40.9%

Quartile

1

3

3

3

2

*Source: FE Analytics, as at 31.03.25, primary share class, total return, net of fees and income reinvested. 

Understand common financial words and termsSee our glossary
KEY RISKS

Past performance does not predict future returns. You may get back less than you originally invested.

We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.

  • Overseas investments may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of the Fund.
  • The Fund, may in certain circumstances, invest in derivatives but it is not intended that their use will materially affect volatility. Derivatives are used to protect against currencies, credit and interest rate moves or for investment purposes. The use of derivatives may create leverage or gearing resulting in potentially greater volatility or fluctuations in the net asset value of the Fund. A relatively small movement in the value of a derivative's underlying investment may have a larger impact, positive or negative, on the value of a fund than if the underlying investment was held instead. 
  • Credit Counterparty Risk: outside of normal conditions, the Fund may hold higher levels of cash which may be deposited with several credit counterparties (e.g. international banks). A credit risk arises should one or more of these counterparties be unable to return the deposited cash.
  • Concentration Risk: the Fund may have a concentrated portfolio, i.e. hold a limited number of investments (35 or fewer) or have significant sector or factor exposures. If one of these investments or sectors / factors fall in value this can have a greater impact on the Fund's value than if it held a larger number of investments across a more diversified portfolio. 
  • Diversification Risk: the Fund is expected to invest in companies predominantly in a single country which maybe subject to greater political, social and economic risks and could result in greater volatility than investments in more broadly diversified funds.
  • Emerging Markets Risk: the Fund invests in emerging markets which carries a higher risk than investment in more developed countries. This may result in higher volatility and larger drops in the value of the fund over the short term.
  • Liquidity Risk: the Fund may encounter liquidity constraints from time to time. The spread between the price you buy and sell shares will reflect the less liquid nature of the underlying holdings.
  • ESG Risk: there may be limitations to the availability, completeness or accuracy of ESG information from third-party providers, or inconsistencies in the consideration of ESG factors across different third party data providers, given the evolving nature of ESG.
  • Sanctions: certain countries, including China, have a higher risk of the imposition of financial and economic sanctions on them which may have a significant economic impact on any company operating, or based, in these countries and their ability to trade as normal. Any such sanctions may cause the value of the investments in the fund to fall significantly and may result in liquidity issues which could prevent the fund from meeting redemptions.

The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

DISCLAIMER

This material is issued by Liontrust Investment Partners LLP (2 Savoy Court, London WC2R 0EZ), authorised and regulated in the UK by the Financial Conduct Authority (FRN 518552) to undertake regulated investment business.

It should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets.

This information and analysis is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content, no representation or warranty is given, whether express or implied, by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified.

This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID) and/or PRIIP/KID, which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.com or direct from Liontrust. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances.

Global Equities

View the latest insights from the Global Equities team.

View Now