Fidelity China Special Situations PLC Annual Results & new variable management fee

  • Net Asset Value (NAV) returned +22.2% (total return) for year ended 31 March
  • The Company increased its dividend by 40% to 3.50 pence per Ordinary Share
  • New Variable Management Fee to replace existing performance fee

Fidelity China Special Situations PLC’s Net Asset Value (NAV) returned +22.2% (total return) for the year ended 31 March. The Board can also announce that the Company has increased its dividend by 40% to 3.50 pence per ordinary share. Over the tenure of portfolio manager*, Dale Nicholls, the Company’s Net Asset Value (NAV) returned +144.8%, compared to the Company’s Benchmark Index**, which returned +98.9%.

Nicholas Bull, Chairman of Fidelity China Special Situations plc, comments: “When we launched the Company back in 2010, the question we encountered was ‘why invest in China?’ Now it is, ‘what is the best way to invest in China?’ We believe that our Company, which has delivered an annualised growth rate of 12.5%*, provides investors with a highly attractive way of gaining exposure to the growing parts of the Chinese economy. The recent announcement by MSCI to include A-Shares in Company’s Benchmark is without doubt a positive step. Not only does it acknowledge the considerable development in the country’s equity markets, but it also puts China firmly on the radar for investors.” 

The Board of Fidelity China Special Situations PLC has announced an overhaul to its fee structure. The Company will remove its performance fee and current fixed annual charge in favour of a new Variable Management Fee.   

The model, which will take effect as of 1 July 2018, will reduce the current headline annual fee of 1.00% of net assets to 0.90% of net assets per annum. The performance fee of up to 1.00% will be removed and replaced with a variable fee which moves symmetrically +/-0.20% relative to the Company’s Benchmark Index. The maximum fee that the Company will pay is 1.10% of net assets, but if the Company underperforms against the Benchmark Index, then the overall fee could fall as low as 0.70% of net assets.

Nicholas Bull continues: “Fund fees have come under increased scrutiny in recent years as investment managers seek to prove their worth in the face of rising demand for low cost passive funds. I am pleased we can today announce a new and innovative charging structure. The new arrangement provides an overall reduction from the current management fee structure, especially in those years where the performance fee was payable.” 

*Data as at 31 March 2018

** MSCI China (GBP)


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