Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for June 2024.
Portfolio Manager Commentary
Chinese equities retreated in June, giving back some previous gains early this year. Investor enthusiasm was initially supported by an upbeat first-quarter GDP reading, strong tourism data, real estate policy support and reforms rewarding shareholders. However, the market reversed following a slew of recent softened economic data. Overall, performance has broadly been led by large-cap national champions with more stable earnings and cash flows, that provide a higher share of their returns through dividends. Thus, state-owned enterprises (SOEs) prevalent in the ‘old economy sectors’ such as utilities, energy, and banks have led market gains. Meanwhile, ‘high-growth’ sectors, such as technology, health care and consumer-focused industries, have lagged.
Nonetheless, despite market headwinds, robust security selection across consumer names, industrials, health care and information technology contributed to the Trust’s outperformance. Notable contributors within the consumer discretionary sector included long-term positions in Hisense Home Appliance, Crystal International, JNBY Design, while industrials holdings in Sinotrans also added value.
Over the 12 months to 30 June 2024, the Trust’s NAV remained unchanged and outperformed its reference index, which delivered -1.1% over the same period. The Trust’s share price advanced 2.3%.
