Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/new-model-adviser/article/a633849
Bolton sticks with Chinese smaller caps despite further losses
by Rachael Revesz on Nov 12, 2012 at 17:28
'Despite their poor relative performance I still believe that the exposure to smaller private companies rather than the state owned large enterprises will prove to be more rewarding in the longer term,' he said.
Bolton said his investment strategy remained unchanged, yet he has been building up exposure in the internet space. He recently rebuilt his position in Tencent, added a 2.1% position in Baidu, and a smaller position in unlisted company Alibaba Group.
Shares in the investment trust fell 9.5% over the six months to 30 September, and the net asset value (NAV) per share was down 6.2%.
The investment trust underperformed the MSCI China Index, which was down 2.1% over the period.
The drop was announced in the fund’s semi-annual results. The fund has struggled to gain traction since its launch at 100p two years ago. The NAV calculated by the company was 78.73p as of 30 September.
The shares are currently trading at around 77p.
The fund’s bank loans increased from 23.8% as of 31 March to 26.1% as of 30 September.
The fund has fully drawn down on its £95 million loan from February this year, but continues to use derivatives for further gearing, totalling a further £41.8 million.
The fund's largest holdings are Ping An Insurance, Tencent Holdings Limited, a software development company, and China Unicom Limited.
News sponsored by:
Today's top headlines
Challenged by growing risk aversion?
Challenging financial markets over recent years have resulted in growing risk aversion among British savers and led many to seek safety in cash. Click here for more.
More about this article:
Look up the shares
Look up the fund managers
More from us
- Bolton's China Special Sits suffers further falls
- Bolton urges investors to hold out for upturn in fortunes
- Bolton: Fidelity China is 'not where I had hoped to be'