Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for March 2026.
Portfolio Manager Commentary
Over the past 12 months, Chinese equities experienced volatility amid trade frictions before rebounding on renewed optimism around innovation-led growth. A temporary US-China tariff truce and increased global interest in China’s technology ecosystem helped support sentiment and drive market dispersion. More recently, volatility has risen again due to US-Iran tensions; however, the country’s relatively lower reliance on energy imports has helped limit the downside. While indirect channels such as energy prices and consumer confidence warrant monitoring, the transmission to Chinese equities remains largely indirect, with innovation continuing to underpin China’s long-term growth trajectory.
At a stock level, Zhongji Innolight advanced on increasing demand for optical connectivity in artificial intelligence applications. An underweight position in Meituan proved beneficial as the stock declined amid intensifying competition in China’s food delivery market, with additional pressure following its acquisition of Dingdong. Conversely, not holding China Construction Bank weighed on returns as investors flocked to the perceived safety of banking assets amid heightened market volatility. LexinFintech detracted amid rising regulatory uncertainty and weaker earnings visibility.
Over the 12 months to 31 March 2026, the Trust’s NAV increased by 10.7%, outperforming the index, which delivered 1.6% over the same period. The Trust’s share price increased 9.5%.
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.
