Fidelity China Special Situations: Outperformance From Broad Portfolio
Edison | Sep 06, 2016 07:58AM ET
Fidelity China Special Situations (LON: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.
Investment strategy: Looking for mispriced assets
Since April 2014, FCSS has been managed by Dale Nicholls. Drawing on Fidelity’s significant regional resources (12 analysts dedicated to Chinese equities), he seeks undervalued companies with long-term growth potential, robust cash flow generation and strong management teams, with company visits and management meetings comprising an important part of the investment process. Stock selection is bottom-up and unconstrained by benchmark allocations, resulting in a diversified portfolio of c 130-140 holdings, with a bias towards consumer discretionary and technology stocks. Gearing is permitted up to 30% of NAV and the maximum exposure to unlisted securities has recently been increased from 5% to 10%.
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Fidelity China Special Situations - Outperformance From A Broad Port
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