Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.
As the Fidelity China Special Situations investment trust marks its 15th anniversary, Investment Director Tom Stevenson sits down with portfolio manager Dale Nicholls and Mike Balfour, chairman of the trust’s board of directors, to reflect on the journey so far.
Together they discuss the challenges and opportunities of investing in China, made all the more compelling by the country’s current investment backdrop and the evolving investment trust landscape. It’s a fascinating watch which dives into what potential opportunities the trust offers to investors - both seasoned and new.
Dale Nicholls, who has managed the trust for over a decade, shared his perspective on the structural changes within China’s economy, from the emergence of entirely new industries like electric vehicles and live streaming, to the growing importance of the consumer sector. Despite recent macro challenges - ranging from the property market slump to ongoing geopolitical tensions - Dale sees long-term potential, particularly in companies geared toward China’s domestic growth.
While performance has been volatile, the Fidelity China Special Situations trust has outpaced the Chinese market over the long term. Nicholls attributes this to a consistent, bottom-up investment strategy that seeks high-quality companies at reasonable valuations. And that market sentiment often moves faster than company fundamentals - something the trust has been able to use to its advantage.
Mike Balfour then dives deeper into the benefits of the trust’s closed-end structure. He also highlighted the board’s role in ensuring good governance and shareholder value, from managing the discount to negotiating costs and overseeing manager performance.
As sentiment toward China continues to fluctuate, both Dale and Mike emphasised the importance of staying focused on the fundamentals. With a track record of identifying long-term opportunities - even during difficult periods - the trust aims to remain a relevant option for investors looking for exposure to China’s evolving economy.
You can watch the full video here to hear how the team is navigating today’s market and positioning for the years ahead.
Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Before investing, please read the relevant key information document which contains important information about each investment trust. The shares in Fidelity China Special Situations are listed on the London Stock Exchange and their price is affected by supply and demand. Investment trusts can gain additional exposure to the market, known as gearing, potentially increasing volatility. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. Eligibility to invest in an ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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