Fidelity China Special Situations (LON:FCSS) has published its monthly factsheet for September 2023.
Portfolio Manager Commentary
China’s economic recovery started on a strong note early this year but has slowed since April. Weak consumption demand and a troubled property market weighed on its growth. Policymakers are now returning to stimulus measures to halt the housing slowdown and revive the economy. This includes recent measures such as lowering mortgage rates and easing home purchase requirements. China continues to be favoured for its attractive valuations, especially given the relatively stronger growth outlook and an accommodative central bank vs. global peers. Geopolitical tensions between the US and China have simmered down, but we remain mindful of potential risks. Both economies remain heavily intertwined, and we continue to monitor how policies have the potential to impact the fundamentals of individual companies and build these risks into our analysis.
Reopening beneficiaries including discretionary spending stocks and insurers posted attractive gains during the period. Holdings in MINISO, Hisense Home Appliance and China Pacific Insurance advanced. In addition, our underweight exposure to internet names including JD.com and Meituan proved rewarding. Their shares remain pressured amid intensifying competition and potential margin loss.
Over the 12 months to 30 September 2023, the Trust’s NAV decreased by 0.1%, outperforming its reference index, which delivered -3.7% over the same period. The Trust’s share price declined 3.1% 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.
