Scottish Mortgage Investment Trust cuts China exposure to 11%

By Summer Zhen

HONG KONG, Sept 30 (Reuters) - Scottish Mortgage Investment Trust said it had more than halved its China exposure over the past six years as it factored in geopolitical and regulatory risks.

• A longtime China bull, Baillie Gifford-managed Scottish Mortgage has cut its China exposure to 11% as of September, from 24% at the end of 2020, the trust told a digital conference last week.

• Geopolitical risks, in particular US restrictions on investment into Chinese companies, and China's domestic regulatory environment, have driven the decision, it said.

• "We want to have access to these exceptional companies, but we're aware that there is a shared common risk between them," said Tom Slater, manager of the Scottish Mortgage Investment Trust.

• The UK's largest investment trust, which invests in both public and private growth companies, had total assets of £17.75 billion ($23.55 billion) at end-August.

• Chinese stocks have underperformed global peers this year with the benchmark CSI 300 Index hitting a one-year low this week amid concerns over domestic demand and US-China tensions.

• Scottish Mortgage said it is still bullish on Chinese tech and automotive stocks including BYD, CATL and ByteDance.

• Remaining invested in China is still critical, said Linda Lin, head of the China Equities for Baillie Gifford.

• In areas such as green technology, advanced manufacturing, robotics and even AI, China is not only catching up, it is setting the pace, she said.

($1 = 0.7538 pounds)

(Reporting by Summer Zhen; Editing by Alexander Smith)