Top Performers in the IA China/Greater China Sector: Insights and Analysis for 2025

Introduction

In the ever-evolving landscape of global investment, the IA China/Greater China sector has showcased remarkable performances in the year ending August 2025. Leading the charge are funds from Invesco, Baillie Gifford, and Matthews, capitalizing on higher-risk strategies that have resulted in outsized returns. This article delves into the intricacies of the sector, deciphering the factors influencing recent volatility, and highlighting the standout performers.

Understanding the 2025 Landscape

A Year of Contrasting Forces

China’s stock market remains a paradox for many global investors. Throughout 2025, a combination of robust government stimulus and lingering external challenges—particularly tensions stemming from Trump-era tariffs—has contributed to market volatility. Investors grappled with weighing immediate policy advantages against deeper structural concerns.

While many view volatility as a warning sign, recent performance metrics in the IA China/Greater China sector suggest it might be a crucial element for success. According to Trustnet, an analysis comparing volatility with total returns reveals that some of the most dynamic funds yielded the strongest gains over the year.

Growth vs. Value: A Noteworthy Shift

During this period, the MSCI China Index experienced a remarkable increase of over 40% in sterling terms, with growth-oriented companies significantly outpacing their value counterparts. This trend is illustrated in the graphs comparing the performance of the MSCI China, MSCI China Growth, and MSCI China Value indexes from August 2024 to August 2025.

Key Performers: The Funds Leading the Charge

Invesco ChiNext 50 UCITS ETF

Invesco has emerged as a dominant force in this space, with the ChiNext 50 UCITS ETF reporting a staggering 93.6% total return. Despite exhibiting 51% volatility, the ETF serves as a “poster child for high-growth Chinese stocks,” according to Freddie Gabbertas of Arbuthnot Latham. The fund’s top 10 holdings, characterized by an average price-to-earnings ratio of 58x, highlight the impressive valuation growth driven by leading tech names such as Eoptolink Technology and Contemporary Amperex Technology.

Baillie Gifford China Fund

Another standout is the Baillie Gifford China fund, which reported a solid 46.2% total return with 29.5% volatility. Since 2014, it has been co-managed by Sophie Earnshaw and Linda Lin, consistently demonstrating volatility across various time horizons. Its notable premier holding, Tencent, has benefited from significant earnings growth and technological advancements in artificial intelligence, resonating well with retail investors seeking compelling narratives.

Matthews China Fund

Matthews China, with its total return of 51% and a volatility of 25.7%, is also noteworthy. Managed by Andrew Mattock, along with deputy managers Winnie Chwang and Sherwood Zhang, this fund has shown remarkable consistency in total returns over one, three, five, and ten years, with a decade-long gain of 136.1%. Its well-diversified holdings span tech firms and financials, including China’s Life Insurance Company and Meituan.

Matthews China Discovery

Another fund in the Matthews lineup, Matthews China Discovery, also demonstrates strength, recording a 43.3% return with a slightly lower volatility of 24.7%. Despite a challenging three-year and five-year performance, the fund has made a notable recovery and focuses on small-cap companies, which often exhibit higher risk but potential for strong returns.

Volatility Isn’t Always a Villain

Interestingly, not all top performers suffered from high volatility. Redwheel China Equity, one of the least volatile funds, recorded a total return of 43.6% with 16.4% volatility, outshining Matthews China Discovery.

Jupiter China Fund

Moreover, Jupiter China achieved a commendable 61.1% total return with 18.2% volatility, outperforming sector averages across numerous timeframes. Manager Ross Teverson seeks long-term capital growth through investments primarily in China, alongside firms deriving a significant portion of earnings from Chinese operations.

Conclusion

The dynamic nature of the IA China/Greater China sector in the year ending August 2025 encapsulates the intricate balance of risk and reward that investors must navigate. While aggressive strategies yielded notable successes, the sector also proved that consistent performance can arise from lower-volatility options. As interest in Chinese markets continues to grow, these insights offer valuable perspectives for current and prospective investors looking to capitalize on the opportunities within this vibrant financial playground.

By understanding these nuances, investors can make more informed decisions that align with their risk tolerance and investment goals.