Fidelity China Special Situations has more than doubled the returns of its benchmark over six months delivering shareholders gains of 56.2% in the period ended 30 September.
Over the same period, the MSCI China index rose by 24.4%. On a net asset value basis, the £2.6bn investment trust returned 51.1%, according to its interim results published on Tuesday morning.
Portfolio manager Dale Nicholls (pictured) said: “Successful control of the Covid-19 virus combined with government stimulus has clearly been an important supporting factor in the China recovery.
“Small localised outbreaks within the China region were handled swiftly and have not really dented the overall economic momentum. China remains on track to be the only major economy to grow in 2020.”
Nicholls said he continued to focus on sectors with “attractively priced growth prospects over the mid-term”, such as consumers, technology and healthcare.
“There remains considerable opportunity in the supply of consumer goods to Chinese households, especially when viewed relative to homes in other countries and the predilection for upgrading and premiumisation among Chinese consumers, which remains a growing trend.”
China MeiDong Auto Holdings was one of the top contributors to performance over the period due to its exposure to luxury brands like BMW, Lexus and Porsche. E-bike manufacturer Yadea Group Holdings was also a strong performer.
Fidelity China Special Situations also reported strong performance from its unlisted companies, which represented 5.8% of the portfolio at the end of November. Over the reporting period, the valuation of Byte Dance increased 27.4% and Sense Time increased 93.2%, with the latter increasing a further 15.8% after the reporting period. In November, the investment trust also initiated a 0.6% position in Full Track Alliance, another unlisted company.
The investment trust’s interim results also revealed a new fee arrangement with 0.9% charged on the first £1.5bn of assets, which will fall to 0.7% on assets after that point.
