Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for April 2025.
Portfolio Manager Commentary
China’s stimulus measures reflect a strong commitment to boosting domestic demand, aiming to drive economic recovery, earnings growth and market sentiment. In early 2025, China’s economy continued to show resilience with first-quarter GDP, industrial production and retail sales exceeding expectations. Accelerated policy support and fiscal spending, alongside some improvement in consumer sentiment aided performance. However, challenges persisted, particularly in the real estate sector. Towards the end of the period, US announced high tariffs on Chinese goods, resulting in retaliatory measures from China. Nevertheless, subsequent willingness of the US administration to engage in negotiations helped ease tensions, limiting the decline in Chinese equities. The holding in Pony AI weighed on gains due to weak Q4 results and declining Robotaxi sales. Following the AI-driven rally in China’s internet and technology names, relative performance was hurt by the lack of exposure to Xiaomi and an underweight position in Alibaba. Encouragingly, LexinFintech contributed notably amid interest from institutional investors. VNET benefitted from AI-driven demand for its data centres. Hesai Group saw significant growth after plans to scale its production to meet rising demand for its LiDAR technology.
Over the 12 months to 30 April 2025, the Trust’s NAV increased by 10.6%, underperforming its reference index, which delivered 18.2% over the same period. The Trust’s share price increased 10.5%.
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. It invests in the public equity markets of China.
