China Special Situations PLC - 15 years on

"These are some of the most dynamic and adaptable managers that I’ve ever met. If things change, they change. I always say: if they made bicycles, and they went out of fashion, they’d change to toothbrushes. They’re not stuck in their ways."

^{Anthony Bolton, July 2025}

In 2010, Anthony Bolton came out of retirement to restart his hugely successful investing career, launching Fidelity China Special Situations. 15 years on, Anthony and his hand-picked successor, Dale Nicholls, joined me in the studio to look back on a decade and a half of investing in the world’s second largest and most dynamic economy - and concluded that it remains a great investment opportunity.

"Now is an exciting time to be invested in China, because it’s one of the few markets in the world that is not near its all-time high. And I particularly compare China to America, which is at its peak - shares have done amazingly well, obviously anything related to AI - and I just don’t feel that that has rubbed off on China.

You get these great disparities - BYD versus Tesla, for example. BYD sells about the same number of cars, but it’s about a seventh of the capitalisation. And then Alibaba and Amazon - they’re different companies, but Alibaba is about a tenth the capitalisation of Amazon. And I think that gap will close."

^{Anthony Bolton, July 2025}

Anthony Bolton started managing the China Special Situations investment trust in 2010, but his interest in the region began around five years earlier, when he filled in for a colleague on a trip to China and was bowled over by what he saw.

Although he was then managing the highly successful Special Situations fund, he took advantage of his ability to move out of the fund’s domestic market with a small proportion of its assets. He invested 10% in Chinese or China-related stocks.

Then a few years later, having stepped back from full-time fund management in the UK, he told Barry Bateman, Fidelity’s boss at the time, that he wanted to head out to Asia and give it another go. The stage was set for the launch of the trust - and its snappy marketing tagline: Bolton to Beijing.

In 2014, Dale Nicholls picked up the baton and has run with it, successfully, for the past 11 years. At its peak, the trust had seen a founder investor’s stake rise five-fold from the launch price. The past is no guide to the future performance of the trust, but Dale, too, remains enthusiastic about the opportunities he’s finding in China. ‘There’s a great dynamism among the companies on the ground. We’ve seen massive innovation over that period, and that’s likely to continue. As companies execute and those earnings come through, I think there’s good potential for that China discount to close.’

Anthony’s conclusion, as he assesses the legacy of China Special Situations: ‘It’s just such a big economy and so important - and that’s why I think all investors need to consider some exposure to China.’