Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for May 2024.
Portfolio Manager Commentary
Chinese equities rallied in the recent months, recouping some of previous losses. Investor sentiment has turned relatively optimistic amidst better-than-expected GDP growth and upbeat tourism data for the May holiday week. Meanwhile, the market has positively responded to the government’s extended policy stimulus to revive demand and reduce housing inventory for the ongoing property slump. Recently introduced measures to encourage Chinese companies to either issue higher dividends or buy back more shares to improve total shareholder returns are now beginning to deliver positive results for shareholders, which has also supported investor confidence. At the same time, valuations in the Chinese equity market still present attractive opportunities, comparing with other major markets.
Security selection within the consumer discretionary sector enhanced gains and holdings in Hisense Home Appliance and Crystal International advanced. Shares in BC Technology rose amid the overall strength of cryptocurrency prices. Sentiment towards logistics company Sinotrans benefited from its growing revenue amid an increase in export volumes and freight rates. Enhanced shareholder returns also supported sentiment.
Over the 12 months to 31 May 2024, the Trust’s NAV increased by 8.9%, outperforming its reference index, which delivered 1.5% over the same period. The Trust’s share price advanced 10.1% over the same period.