View the article online at http://citywire.co.uk/wealth-manager/article/a633849
Bolton keeps faith in Chinese smaller companies despite setbacks
by Rachael Revesz on Nov 13, 2012 at 11:22
'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,' the veteran manager said.
Bolton said his investment strategy remained unchanged, yet he has built up exposure in the internet space. He recently restored 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%, according to its half-year results published yestereday.
The investment trust underperformed the MSCI China Index, which was down 2.1% over the period.
The fund has struggled to gain traction since its launch to great fanfare two years ago after Bolton, who made his name running the Fidelity Special Situations fund for many years, came back from retirement.
The shares are currently trading at around 77p, down from their 100p launch price. The NAV per share stood at 78.73p as of 30 September, according to the company.
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 or borrowing, 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.
Bolton (pictured) said this quarter has continued to disappoint, with the main cause being the combination of China’s slowdown, the fund’s gearing and its high exposure to medium and smaller sized companies.
‘Encouragingly the markets and the company have performed better in October,’ he said.
News sponsored by:
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
The Citywire guide to investment trusts
Investment trusts have proved to be a highly effective way to invest in the market. Citywire has interviewed the experts to find out more.
With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop
More about this:
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'
On the road
J.P. Morgan Elect on investment growth, income and cash. More information on J.P. Morgan investment trusts.
by Robert St George on Jul 24, 2014 at 13:51