Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a644765

Bolton buoyant about China in 2013

by Rachael Revesz on Dec 11, 2012 at 08:32

Bolton buoyant about China in 2013

Fidelity fund manager Anthony Bolton has backed Asia to come out of its bear market and predicted China will see growth of 7% in 2013.

Bolton (pictured) said he was aiming for a ‘decent return’ for the Fidelity China Special Situations investment trust in 2013 after a tough 2012.

‘Asia has been in a bear market for three years and I think that’s going to change soon because the economic cycle is in its favour,’ he said. ‘Some of the things that worried people will become less worrisome. Valuations are very low and sentiment is very negative, but at least we know now, for example, who the new leader will be.’

‘Performance has been tough….it’s been a down market, the bias to small and mid-cap stocks. Consumer-related stocks have been underperforming in the slowing of the economy. It’s tended to be the defensive payers globally that have done better, although this will change next year.’

He added that his gearing of 26% had also acted against him in a down market.

Bolton said he saw encouraging signs which suggested growth and stabilisation in China.

‘Lending prices are up in the last couple of months so most of the economic data suggests stabilisation and a return to growth,’ he said. ‘In the medium term I see lower growth in China, but higher quality growth, instead of growth due to infrastructure, which is good when you have it but causes problems further down the road.’

He predicted 7% growth in China next year, and said real inflation was closer to 4%.

‘The days of real GDP growth at more than 10% are over and if you listen to the new politicians that is what they are saying, they want growth but more stable growth,’ he said. ‘The wage increase has been quite high: that benefits consumer expenditure and is one of the things that stops inflation getting too low.’

Bolton said he was interested in trends such as shale gas drilling in China, healthcare, IT and consumer services and property.

Recent purchases include a 2.3% stake in Alibaba, an internet company that Fidelity private equity has been invested in for over 10 years, and 21 Vianet, which owns internet servers and is the biggest independent provider of data storage in China.

3 comments so far. Why not have your say?

Keith Cobby

Dec 11, 2012 at 09:20

Jam yesterday, jam tomorrow but never jam today - now who said that?

report this

Greg Thomas

Dec 11, 2012 at 12:52

Well he would wouldn't he?

report this

Edinburgh Investor

Dec 17, 2012 at 12:26

As an investor in this fund, I am truly underwhelmed by its performance. If this had been a new fund manager in charge, he would have been removed a while ago. Saying that accounting practices in China has somehow come as a surprise to a well resourced (and well paid) team from a large fund manager is very disappointing.

It is still an interesting market and it sounds like they are only just realising what is happening in the economy. The "special situations" bit in the title should allow them to take advantage of the anomalies of the market, not post a woeful minus 20%. The comments quoted above are vacuous rubbish and must have taken minutes to trot out.

It seems that Mr Bolton is trading off his reputation and the management of this trust is a shadow of his former performance. Please, get us back to zero losses so we can go elsewhere...

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Opportunities emerge as production moves back home

As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

A spotlight on Alastair Mundy

Alastair Mundy met Citywire's Daniel Grote at the London Stock Exchange Studios for a detailed interview about the Investec Cautious Managed fund.

More about this article:

Look up the shares

  • Fidelity China Special Situations PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the fund managers

  • Anthony Bolton
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them


Sorry, this link is not
quite ready yet