Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for November 2024.
Portfolio Manager Commentary
Recent government stimulus measures in China show a strong commitment to tackling economic issues and boosting domestic demand. While consumer confidence remains low, discussions with many companies suggest that the worst of job cuts, especially in technology, may be behind us. Elevated household savings indicate potential buying power that could support recovery. Until recently, earnings revisions have trended downward, but we are seeing improvements. The aim is for supportive policies to drive a turnaround in economic fundamentals, leading to broader earnings growth and improved market sentiment. Equity market valuations remain attractive compared to historical averages and global markets. Geopolitical concerns, particularly US tariffs on Chinese goods, persist, but both investors and companies are aware of these risks, and we continue to monitor what is priced in.
Selected consumer discretionary stocks declined, mainly due to weaknesses in Pony.ai. The healthcare holding in Zhaoke Ophthalmology decreased amid uncertainty related to its drug launches, while geopolitical issues impacted Wuxi Apptec. An overweight position in financials, through insurers and financial services, boosted performance, with LexinFintech, Qifu Technology, and Ping An Insurance being notable contributors.
Over the 12 months to 30 November 2024, the Trust’s NAV increased by 5.3%, underperforming its reference index, which delivered 13.0% over the same period. The Trust’s share price increased 1.3%.
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.
