Trustnet Magazine 60 March 2020 | Page 10

Cover story [ KEEPING IT UP ] 10 / 11 is highly likely to underperform in a rampant value market and vice versa. “A period of underperformance does not mean an investor was wrong to trust a fund manager, rather it is an opportunity to test whether the individual has what it takes to cope with tough times, acting with consistency and focus in the face of unfavourable markets. “Vitally though, we must avoid those individuals who become entrenched in views despite mounting evidence against them and who have not surrounded themselves with people who can provide challenge.” “A period of underperformance does not mean an investor was wrong to trust a fund manager, rather it is an opportunity to test whether the individual has what it takes to cope with tough times” Difficult second album Unfortunately, that wasn’t quite the end of Bolton’s story and after stepping down from Fidelity Special Situations, he launched the Fidelity China Special Staying power Situations trust in April 2010. So what is the longest that a fund In a classic case of what can go wrong manager has been able to maintain when a manager changes strategy, he their outperformance in light of all of found the lower corporate governance these issues? standards harder to navigate, and two Anthony Bolton is an obvious place of his holdings were accused of fraud. to start. By focusing on undervalued While Bolton eventually turned things and out-of-favour companies, the UK’s around, with the trust beating the MSCI original star manager made a total China index under his tenure, four-year return of 14,124 per cent between the returns of 5.76 per cent disappointed launch of Fidelity Special Situations anyone hoping for a repeat of his magic at the end of 1979 and the time of his touch on Fidelity Special Situations. departure in 2008, compared with Bolton is not the only manager who 3,336 per cent from the MSCI United has outperformed over a multi-decade Kingdom index. To put it another way, period, though, with Green drawing £1,000 invested in his fund at the start attention to Nigel Thomas, who retired of this period would have grown to £142,240 by the end. TRUSTNET trustnet.com