Liontrust’s Global Technology Fund has nearly doubled its China allocation from 6% to 11%, moving profits from US tech giants to Chinese firms thriving in the AI sector. The fund reported a 13.3% return as of May 2025, outperforming the MSCI World IT index, which was in negative territory.
This China rotation is driven by the heightened valuations of US tech stocks, pushing the fund to redirect capital toward undervalued Chinese companies. Key contributors like Tencent and Meituan emerged following the announcement of DeepSeek’s AI model in January 2025, sparking optimism in China's tech landscape.
Liontrust has also invested in Alibaba and Xiaomi, which have gained favor with investors following positive updates early in 2025.
The fund, managed by UK-based Liontrust Asset Management, concentrates over 80% of its holdings in global IT and communication services stocks. Chinese tech firms, after years of restructuring post-2021 regulatory crackdowns, are poised for growth as they expand into various sectors.
Although the fund avoids digital assets, China’s AI advancements bolster semiconductor supply chains essential for crypto and blockchain technologies.