Fidelity China Special Situations PLC
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The UK’s largest China investment trust, Fidelity China Special Situations PLC, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.
China's sheer economic size and year-on-year growth means that investors should consider an exposure to the region when building a balanced portfolio.
Fidelity International is able to use its large Asia-based investment team to identify companies which are most likely to benefit from China's growth and changing economy. In this way, a portfolio of over 100 underlying investments has been built for Fidelity China Special Situations PLC which provides focused exposure to China's true potential.
Celebrating 10 years”
Celebrating 10 years of China Special Situations PLC
Dale talks to Lawrence Gosling, Investment Week Editor-in-Chief, about the opportunities the trust offers to investors and the specific themes that he believes will reward over the long term.
Celebrating 10 years of China Special Situations PLC
Dale Nicholls, Portfolio Manager of Fidelity China Special Situations PLC looks back over the last 10 years and explains why he believes the long-term investment case remains as strong as ever.
Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and you may not get back the amount you invested. Fidelity does not give advice. If you’re unsure of the suitability of an investment for you, you should speak to an authorised financial adviser.
Overseas investments are subject to currency fluctuations. This Investment Trust invests in emerging markets which can be more volatile than other more developed markets. This Investment Trust may also invest more heavily than others in smaller companies, which can carry a higher risk because their share prices may be more volatile than those of larger companies. Investment Trusts can gear through the use of bank loans or overdrafts and this can be achieved through the use of derivatives. Their use may lead to higher volatility in the Net Asset Value and Share Price.
What is our approach?
Dale Nicholls, the Portfolio Manager, makes full use of Fidelity's extensive investment research presence and investment licenses in China - which are among the largest of any international investors.
Dale focuses on undervalued companies which have good long-term growth prospects which have been underestimated by the wider market.
He has a bias to small and medium-sized companies, where lower levels of research by competitors leads to greater opportunities for mispricing - but he is not constrained and may invest in large or mega-cap companies such as state-owned-enterprises where mispricing appears.
Dale has identified the growth of the middle class and a refocusing on China's economy towards domestic consumption as key drivers of its economy and stock market in the coming years; he therefore focuses on those products and services that cater for this growth within China.
Dale may invest in companies listed domestically in China or Hong Kong or elsewhere (such as the United States) where those companies' primary revenue exposures are within China.
Dale is also free to invest up to 10% of the portfolio in unlisted companies with a view to their Initial Public Offering - providing investors in Fidelity China Special Situations PLC with some of the broadest access to investment opportunities in China.
Who is Dale Nicholls?
Dale Nicholls joined Fidelity in 1996 as a Research Associate in our Tokyo office. It was during his tenure as an analyst that Dale first began to take an interest in the dynamics of the Chinese market. He regularly visited Chinese companies to get a clear view of the key supply and demand chains of the industries he covered. In 2003, he was promoted to portfolio manager of the Fidelity Pacific Fund and retains management of that portfolio today. In his current role, Dale spends much of his time traveling within China to meet with the management teams and competitors of companies in which he may, or already does, invest, visiting well over 100 companies a year.
Prior to joining Fidelity, Dale worked at Bankers Trust Asia Securities in Tokyo and as a Market/Business Analyst at Sony Corporation, also in Tokyo. He graduated from the Queensland University of Technology in Australia.
The investment objective of the Company is to achieve long-term capital growth from an actively managed portfolio made up primarily of securities issued by companies listed in China and Chinese companies listed elsewhere. The Company may also invest in listed companies with significant interests in China.
Summary of the key aspects of the Investment Policy
The Portfolio Manager will focus on identifying companies which are most likely to benefit from China’s growth and changing economy.
The Company is not restricted in terms of size or industry of companies included in the portfolio and may invest in unlisted securities.
The Company may also invest into other transferable securities, collective investment schemes, money market instruments, cash and deposits and is also able to use derivatives for gearing purposes and efficient portfolio management.
The Company has adopted a variable management fee which is calculated by referencing performance relative to the MSCI China (N) Index.
Portfolio Manager’s Review
Board of Directors
Reports and Literature
Investors should be aware that the content of the Key Information Document (KID), including methodologies for the calculation and presentation of risks, performance scenarios and costs are defined by technical standards under the EU’s PRIIPs Regulation. The forward-looking Performance Scenarios are based on degrees of variation from historic performance, and cannot be guaranteed. The figures in the KID may not reflect the expected returns for the Company and will be higher following periods of strong returns and lower following market falls. Please remember that past performance is not a guide to future performance.
Fidelity China Special Situations PLC latest news and insights
Next AGM: July 2021
Fidelity China Special Situations announces its Annual Results - March 2020
The Company announces its final results and plans for the AGM.
Update on Coronavirus - February 2020
The Fidelity Asia investment team update on the likely impact.
Fidelity China Special Situations PLC announces its latest results - June 2019
The Company announces its final results and also the adoption of a formal discount policy.
The changing face of the China Consumer - April 2019
As local brands gain traction and demand for consumer services in China increases, portfolio manager Dale Nicholls reveals how he is positioning to capture emerging investment opportunities.
China - new year, different story? - February 2019
The general view from overseas investors is that the ongoing trade conflict with the US is impacting China as it targets China’s key export sector.