Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for July 2026.
Portfolio Manager Commentary
Chinese equities declined over the period. Markets were initially supported by optimism around innovation and technology-led growth, but sentiment later weakened as investors focused on markets with greater exposure to AI beneficiaries. Geopolitical tensions and macroeconomic uncertainty also weighed on performance. Economic data remained mixed, with inflation turning positive, property markets in major cities showing signs of stabilisation and consumer spending remaining weak. Looking ahead, we believe the outlook is supported by ongoing policy measures, structural reforms, continued technological development, improving domestic demand and a gradual recovery in the property sector.
At the stock level, Zhongji Innolight performed well, benefiting from strong demand for optical connectivity products used in AI applications. ByteDance also gained on optimism around its AI strategy, strong revenue growth and improving sentiment towards TikTok’s US operations. In contrast, HashKey Holdings detracted as sentiment towards digital assets weakened. EHang Holdings fell due to slower-than-expected progress in commercialising its eVTOL aircraft and weaker delivery growth. While we remain positive on the company’s long-term potential, regulatory uncertainty and slower industry development have reduced near-term visibility.
Over the 12 months to 31 July 2026, the Trust’s NAV fell by 6.3%, compared with a 2.8% decline in the index. The Trust’s share price decreased by 2.2%.
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.
