Fidelity China Special Situations (LON:FCSS) published its monthly factsheet for the period ended 31st March 2023.
Portfolio Manager Commentary
China continues to be favoured for its attractive valuations and upbeat outlook for a consumption-led recovery. The overall pro-growth environment in China will support its post reopening recovery. Following policymakers’ accommodative policy shifts, the property sector and service activities stabilised and improved, which was well received by investors. Meanwhile, China’s market valuation remains at historical lows despite the recent rally, suggesting more upside from re-rating. Although increasing geopolitical tensions between the US and China fed through to investors’ perception of risk premium and drove some profit taking, we do not see this derailing the reopening recovery thesis.
The overweight stance in consumer discretionary sector added notable value. Consumer names advanced amid hopes of consumption recovery and holdings in MINISO, Hisense Home Appliance and Luk Fook advanced. Meanwhile, tanker transportation companies benefitted from tailwinds associated with oil demand recovery as air and road traffic regained momentum, thus the position in COSCO Shipping Energy Transportation increased.
Over the 12 months to 31 March 2023, the Trust’s NAV increased by 2.6%, outperforming its reference index, which delivered 1.4% over the same period. The Trust’s share price advanced 0.3% over the same period.
Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.