Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for March 2025.
Portfolio Manager Commentary
Stimulus measures in China show a strong commitment to boosting domestic demand. The aim is for supportive policies to drive a turnaround in economic fundamentals, leading to broader earnings growth and improved market sentiment. The Chinese economy showed resilience in early 2025, with retail sales and industrial production exceeding expectations as seen in January – February economic activity data. While consumer confidence remains low, elevated household savings indicate potential buying power that could support recovery once confidence is restored. Meanwhile, investors remain cautious on tariff hikes from the Trump administration.
The holding in Pony AI weighed on gains due to weak Q4 results and declining Robotaxi sales. Towards the end of the period, excitement around DeepSeek sparked a rally in China’s internet and technology names. Against this backdrop, 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 benefited from AI-driven demand for its data centres, while Hesai Group saw growth due to its acquisition of a Swiss IP and stronger ties with BYD.
Over the 12 months to 31 March 2025, the Trust’s NAV increased by 31.5%, underperforming its reference index, which delivered 37.5% over the same period. The Trust’s share price increased 35.8%.
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.
