Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for August 2025.
Portfolio Manager Commentary
China’s stimulus measures reflect a strong commitment to boosting domestic demand, aiming to drive earnings growth and economic recovery. In 2025, China’s economy continued to show resilience with robust industrial production and retail sales. Accelerated policy support and fiscal spending, alongside some improvement in consumer sentiment aided performance. Improving liquidity and increased market participation by retail investors also lifted sentiment. However, challenges persisted, particularly in the real estate sector. Announcement of high tariffs by the US on Chinese goods resulted in retaliatory measures from China. Nevertheless, subsequent willingness of the US administration to engage in negotiations helped ease tensions.
Hesai Group saw significant growth after plans to scale its production to meet rising demand for its LiDAR technology. LexinFintech contributed notably amid interest from institutional investors and solid earnings. VNET benefitted from AI-driven demand for its data centres. Conversely, relative performance was hurt by the underweight position in EV brand Xiaomi. We prefer to have exposure to the EV theme through supply chain names instead of EV brands. The holding in Pony AI weighed on gains due to weak earnings results and declining Robotaxi sales.
Over the 12 months to 31 August 2025, the Trust’s NAV increased by 69.2%, outperforming its reference index, which delivered 43.6% over the same period. The Trust’s share price increased 75.7%.
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.
