Fidelity China Special Situations
Seeking out and capitalising on structural winners
1 June 2021
Fidelity China Special Situations (FCSS) aims to deliver long-term capital growth from a portfolio of stocks listed mainly in China and Chinese companies listed abroad. Manager Dale Nicholls focuses on undervalued companies. He favours consumer sectors set to benefit from structural trends driven by the burgeoning growth of China’s middle class. He sees most opportunities in mid- and small-cap technology, healthcare and e commerce stocks and among unlisted companies, all of which are often under-researched and thus mispriced. For Nicholls, the recent pull-back in Chinese markets has created ‘a great environment in which good but undervalued companies offer even better value’. Nicholls’ approach has delivered absolute returns and outperformance of FCSS’s peers, and its benchmark, the MSCI China Index both recently and long term. Relative performance has been especially strong over the past year, thanks to superior stock selection and sector allocation decisions. MORE »
Domestic trends drive sustained outperformance
11 December 2020
Fidelity China Special Situations (FCSS) aims to deliver long-term capital growth from a portfolio of stocks listed mainly in China and Chinese companies listed abroad. Manager Dale Nicholls focuses on consumer-led sectors, which have the greatest exposure to China’s growth prospects and he sees many great investment opportunities, especially among lesser-known, smaller-cap stocks and unlisted companies. Nicholls believes these businesses are driving innovation and change but are often undervalued. FCSS has delivered significant outright returns and outperformance of its MSCI China benchmark and the UK market since the fund’s inception in 2010. MORE »
Domestic growth focus delivers outperformance
21 July 2020
Fidelity China Special Situations (FCSS) aims to achieve long-term capital growth from an actively managed portfolio of stocks mainly listed in China and Chinese companies listed abroad. It is the largest UK investment trust focused on China. Manager Dale Nicholls believes that the COVID-19 crisis has accelerated several of the trends driving Chinese growth and he sees many investment opportunities, especially among under-researched, mis-priced small-cap stocks. Nicholls’s unconstrained approach allows him to invest in high-conviction ideas, principally in higher-growth consumer-led sectors, which will benefit from China’s strong growth prospects. The trust has delivered significant outperformance against its MSCI China benchmark since inception. MORE »
Weak sentiment providing opportunities
20 February 2020
Fidelity China Special Situations (FCSS) aims to deliver long-term capital growth, following a bottom-up approach to investing in companies listed in China, and Chinese companies listed elsewhere. The trust marks its 10th anniversary in April 2020 and, since inception, it has generated an annualised NAV total return of 11%. Chinese equities have been relatively out of favour for some time against a backdrop of the US-China trade dispute, Hong Kong political protests and, more recently, the coronavirus. The manager, Dale Nicholls, is finding exciting opportunities at attractive valuations, and continues to focus primarily on smaller companies that can benefit from long-term secular growth trends. MORE »
Weak sentiment providing opportunities
19 February 2020
Fidelity China Special Situations (FCSS) aims to deliver long-term capital growth, following a bottom-up approach to investing in companies listed in China, and Chinese companies listed elsewhere. The trust marks its 10th anniversary in April 2020 and, since inception, it has generated an annualised NAV total return of 11%. Chinese equities have been relatively out of favour for some time against a backdrop of the US-China trade dispute, Hong Kong political protests and, more recently, the coronavirus. The manager, Dale Nicholls, is finding exciting opportunities at attractive valuations, and continues to focus primarily on smaller companies that can benefit from long-term secular growth trends. MORE »
Domestic opportunities offer exciting prospects
11 November 2019
Fidelity China Special Situations (FCSS) offers investors direct exposure to China for a portion of their portfolio, aiming to deliver long-term capital growth from investing in companies listed in China, and Chinese companies listed elsewhere. Since the trust’s inception in April 2010, FCSS’s NAV total return has increased by nearly 11% pa. The portfolio has a bias towards mid- and small-cap companies, which tend to be less well researched and potentially mispriced. The manager, Dale Nicholls, is focused on opportunities related to rising domestic consumption, which in his view is unlikely to be disrupted by the ongoing US-China trade dispute. MORE »
Strong longer-term absolute and relative returns
3 July 2019
Fidelity China Special Situations (FCSS) has had a challenging period over the last 12 months, with its performance affected by a significant sell-off in Chinese equities. However, the longer-term performance remains strong in absolute and relative terms, with a 16.9% pa NAV total return over five years clearly ahead of the 14.1% pa return of the MSCI China index. The manager continues to find attractive new investment ideas, such as recent portfolio addition, luxury e-commerce platform Secoo Holding, and points to the opportunities for long-term focused stock pickers that can be created by market volatility. FCSS’s discount has recently narrowed below 10% and the board has introduced a formal single-digit discount control policy, which should help reduce future discount volatility. MORE »
Confident in the long-term outlook
25 January 2019
Fidelity China Special Situations (FCSS) had a challenging year in 2018, heavily influenced by the correction in Chinese equities that was longer and deeper than in other major stock markets. However, the trust’s longer-term returns have been strong, with an impressive 14.0% annualised NAV total return over five years, which is well ahead of its benchmark MSCI China index, as well as the MSCI World and FTSE All-Share indices. The market fall created compelling opportunities for manager Dale Nicholls, who added to holdings in high-quality companies that were trading at historically low valuations. The manager is optimistic about the long-term outlook, but he anticipates that volatility may persist and cut net market gearing from c 23% to c 18% in December 2018, mainly via index hedges. MORE »
Accessing China's superior growth prospects
15 November 2018
Fidelity China Special Situations (FCSS) aims to provide an attractive way for investors to gain exposure to the faster-growing areas of the Chinese economy, with China’s growing economic influence raising its importance within a balanced portfolio. FCSS’s longer-term performance has been strong – its NAV total return is ahead of the MSCI China index over five years and since its launch in 2010 – but returns are negative over one year, reflecting the Chinese stock market downturn. While market sentiment has suffered due to the US-China trade dispute, earnings forecasts have been largely unaffected, and the manager has used the correction to add to holdings with strong long-term prospects at historically low valuations. MORE »
Focused on China’s domestic opportunity
15 June 2018
Fidelity China Special Situations (FCSS) provides exposure to a diversified, actively managed portfolio of Chinese equities. The manager takes a bottom-up approach to stock selection, focusing on the faster-growing consumer-orientated sectors of China’s economy. FCSS’s NAV returns have been strong over the last two years, although modestly lagging its MSCI China index benchmark. This is attributed to FCSS’s tilt to small- and mid-cap stocks, which underperformed large-caps, partly due to passive capital flows into index funds. Over five years, FCSS has significantly outperformed the benchmark, as well as its open- and closed-ended peers. A new variable management fee structure, with a lower base level and no performance fee, will take effect from July 2018. MORE »
Attractive valuations and growth prospects
15 September 2017
Fidelity China Special Situations (FCSS) invests in a diversified portfolio of Chinese equities, seeking exposure to higher-quality companies, primarily in faster growing, consumer-orientated areas of the economy. FCSS provides actively managed exposure to the Chinese market, following a bottom-up investment approach, unconstrained by index weightings, and currently has no holdings in banks or property, which are considered to be higher-risk sectors. FCSS has achieved a 14.5% pa NAV total return since its launch in April 2010, and its performance is considerably ahead of the MSCI China index and the world market over three and five years. MORE »
Still finding investment opportunities
4 April 2017
Fidelity China Special Situations (FCSS) was launched in April 2010 aiming to generate long-term capital growth from investing in Chinese companies or companies that generate the majority of their revenues in China. Manager Dale Nicholls invests for the long term, seeking companies with long-term growth potential that are trading at reasonable valuations. FCSS’s NAV and share price absolute total returns have been very strong over the last 12 months, and the trust has meaningfully outperformed the index over one, three and five years and since the fund’s inception. FCSS has also outperformed the majority of its open- and closed-ended peers over one, three and five years. MORE »
Outperformance from a broad portfolio of stocks
6 September 2016
Fidelity China Special Situations (FCSS) is an actively managed fund seeking long-term capital growth from investment in Chinese companies. The manager focuses on faster-growing consumer-oriented sectors and a large percentage of the portfolio is invested in mid- and small-cap stocks, which are often under-researched with valuations not reflecting the quality and potential of the business. Absolute performance has been strong and FCSS has outperformed its MSCI China index benchmark over one, three and five years and since inception, achieving substantial outperformance of open- and closed-ended peers over one, three and five years. MORE »
Market moves creating opportunities
20 April 2016
Fidelity China Special Situations (FCSS) is a specialist actively managed fund investing in Chinese equities. The manager focuses on sectors set to benefit from changing consumption trends and the rising middle class where long-term growth is expected to exceed GDP growth. Against a background of market decline and high volatility, FCSS has continued to outperform with NAV total returns ahead of the benchmark MSCI China Index as well as open and closed-ended peers over one, three and five years. The manager continues to find attractive investment opportunities and has recently increased gearing, reflecting a more positive outlook. MORE »
Outperforming in volatile markets
4 August 2015
Fidelity China Special Situations (FCSS) is a specialist actively managed fund focused on Chinese equities. Against the background of exceptional market volatility recently, FCSS has outperformed with NAV total returns ahead of the benchmark MSCI China index over one, three and five years, and it has substantially outperformed all closed- and open-ended peers over three years. The manager has maintained a consistent investment approach through recent market fluctuations focusing on consumption-led sectors where long-term growth is expected to exceed GDP growth. MORE »
Accessing China's long-term growth potential
20 March 2015
Fidelity China Special Situations (FCSS) is a specialist, actively managed closed-ended fund that invests in Chinese and other related equities to provide exposure to the secular growth of the Chinese economy. The trust has outperformed its MSCI China benchmark by over 25% since launch in 2010 and its NAV total return is ahead of open-ended and closed-ended peers over three years. The portfolio is focused on consumption-led sectors expected to grow faster than GDP and the manager is avoiding sectors such as banks where risks are considered to be greatest. MORE »
Focused on China's long-term growth potential
2 September 2014
Fidelity China Special Situations (FCSS) invests in Chinese and other related equities providing exposure to the secular growth of the Chinese economy. Dale Nicholls recently took over as manager from Anthony Bolton and he continues the focus on identifying mispriced shares in cash-generative companies with good long-term growth prospects and strong management teams. There is a bias towards smaller companies that are less well researched, but tend to be higher risk. Although exhibiting above-average volatility, the Chinese market offers a combination of favourable growth prospects and potential for re-rating driven by ongoing market reforms. MORE »
