IN FOCUS
FUND
PENSION
FIDELITY CHINA
SPECIAL SITUATIONS
Oct
Apr 15
Oct
Apr 14
Oct
Apr 13
Oct
Apr 12
Oct
Apr 11
Oct
Apr 10
Oct
-40%
Source: FE Analytics
10
trustnetdirect.com
trustnetdirect.com
30%
20%
10%
0%
-10%
Dec
-20%
MSCI China (19.58%)
40%
Oct
0%
50%
Aug
20%
Fidelity (FIL Invt Intl) - Fidelity China Special
Situations (39.89%)
60%
Jun
40%
70%
Apr
60%
MANAGERS: Dale Nicholls
PREMIUM/DISCOUNT: -16.4%
LAUNCHED: 19/04/2010
OCF: 1.35%
PERFORMANCE OF TRUST, SECTOR
AND INDEX OVER MANAGER TENURE
Dec
80%
Dale Nicholls took charge of the
trust following Bolton’s retirement in
April 2014 and its performance has
rocketed since then. While this can
partly be attributed to an initial bull
run in Chinese stocks in the early
days of his tenure, the trust has also
held up much better than the market
during the collapse of the past six
months.
Data from FE Analytics shows it
is up 39.89 per cent under Nicholls’
management compared with returns
of 19.58 per cent from the MSCI
China index.
Excluding the effect of discount
widening/tightening, the portfolio’s
Oct
Unicorn - Mastertrust (98.03%)
IA Flexible Investment (42.61%)
T
he most important
consideration for investors in
the early years of saving for
their pension is growth. You should
feel comfortable taking on more risk
at this stage in a bid to boost returns,
as you will have such a long time
over which to make back any losses.
For this reason, you may wish to
consider looking at out of favour
investment vehicles – and Fidelity
China Special Situations fits this bill.
China’s market has been
hammered over the past six months,
due to fears of slowing economic
growth and the devaluation of the
yuan and it was forced to cease
trading twice in the opening week
of 2016. This has led to the trust
trading on a substantial discount of
16.4 per cent – offering the potential
for huge returns over the long term
if performance improves and this
figure narrows or moves on to
a premium.
Fidelity China Special Situations
was launched to much fanfare
in April 2010 as a vehicle for star
manager Anthony Bolton. However,
Bolton failed to replicate the
spectacular returns he delivered
while in charge of Fidelity Special
Situations, blaming lower standards
of corporate governance, and the
trust slumped into the fourth quartile
of its Asia Pacific sector.
Aug
100%
With China currently out of favour, this trust’s hefty
discount may present a buying opportunity for investors
in the early stages of saving for their pension
Jun
which measures performance
achieved through investments that
differ from those of its benchmark,
over one, three, five and seven years.
Unicorn Mastertrust currently
has 52 holdings, its largest of
which are F&C Investment Trust
and Acorn Income at 3.6 per cent
of assets, followed by TR Property
Investment Trust at 3.5 per cent,
Caledonia Investments at 3.4 per
cent and Herald Investment Trust
at 3.3 per cent.
The fund has a clean OCF of 0.89
per cent.
Walls recently told Trustnet
Magazine he has bought into the
BlackRock World Mining IT despite
numerous threats to the area of the
market it operates in.
PERFORMANCE OF FUND VS SECTOR OVER MANAGER TENURE
Apr 09
MANAGERS: Peter Walls
FUND SIZE: £29.1m
LAUNCHED: 31/12/2001
OCF: 0.89%
immediately began to make punchy
calls on buying into trusts trading
at a significant discount to net
asset value.
His technique worked, as the
fund jumped from the bottom
decile in 2008 to the top decile in
2009. Over his tenure, it has more
than doubled the gains of the IA
Flexible Investment sector.
Because Walls’ fund sits in the
IA Flexible Investment sector, it
can invest across a wide range of
assets and at any weighting. The
£29m fund currently has 81.8 per
cent of its assets in equities, 3.1
per cent in financial services and a
9.8 per cent holding in cash.
This flexibility has helped it to
deliver a top-decile alpha score,
Oct 08
F
unds-of-funds often divide
investors, with many
preferring to choose their own
investment vehicles rather than
relying on a manager to do it