FIDELITY CHINA SPECIAL SOLUTIONS: UK’s top China-focused investment trust searches for undervalued companies
What is it?
Fidelity China Special Situations is the UK’s largest investment trust focused on China.
It employs a locally based analyst team, and its manager Dale Nicholls searches for undervalued companies which he believes have good long-term growth prospects.
What does it invest in?
Nicholls generally focuses on small and medium-sized firms, but may also occasionally invest in larger groups.
Some of those major companies include Tencent, ecommerce firm Alibaba and car dealership China Meidong Auto.
What do the experts like?
As the world’s second-largest economy, with an ever-growing middle-class who are buying more, China presents a huge opportunity.
Dzmitry Lipski at Interactive Investor says the trust gives well-diversified exposure to Chinese and Hong Kong companies, with between 130 and 140 firms in its portfolio.
Lipski warns: ‘The portfolio is relatively concentrated, with the top-ten holdings making up almost half of the trust.’
Coronavirus is also a big unknown for China’s economy.