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Bolton: why China index funds won't cut it in 2014
by Eleanor Lawrie on Dec 12, 2013 at 08:57
His three key overweights are IT (including internet companies), consumer discretionary, and pharmaceuticals.
Bolton insisted there was a place in portfolios for some native Chinese companies rather than purely targeting international brands - even though he has lost money on such bets in the past.
'Some people think the best way to invest in China is by the big names like BMW, but even growth investors should have some money directly in the space. It's always diluted and you are always getting some other exposure as well. I think you should have some money in the pure Chinese stocks,' he said.
Fidelity China Special Situations investment trust's share price has risen by 33.2% on a total return basis in the year to October 31, compared to a rise of 9.6% for the benchmark MSCI China index. In three years the trust's share price has fallen by 16.8 per cent, compared to a fall of 1.1 per cent by the index.
'One of the key mistakes investors make over China is to apply western rules and then come to a number of conclusions. It leads people to have a polarised view of China- some very negative and positive,' the manager, who retires in April, added.
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