Investment trust insider on China – James Carthew: China debate should focus long term not on short-term weakness
Last May, I was pondering whether to add more exposure to China in my portfolio by buying Fidelity China Special Situations (FCSS). In the end, as explained in that article, I chickened out, which is good news as I would be looking at a loss on that today.
The FCSS share price is now 218p, down from about 235p on 6 May last year and back to levels seen in 2017. Over the past three months, the four dedicated China trusts – FCSS; JPMorgan China Growth and Income (JGCI), which I still have a small position in; Baillie Gifford China Growth (BGCG) and Abrdn China (ACIC) – rank fourth to seventh in the list of the worst-performing of all investment companies over the past three months in terms of net asset value. That makes me wonder whether they are oversold.
It is interesting that the performance of all four funds is close to identical over the past three months. I think this might illustrate that this is a macroeconomic problem, not a stock selection one.
FCSS has just published its annual report, covering the events of the 12 months to 31 March. Chairman Mike Balfour’s statement is remarkably upbeat considering the recent slide in the Chinese market. He notes that from an economic point of view, China is out of sync with the rest of the world.
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