Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for December 2025.
Portfolio Manager Commentary
After a volatile start amid global trade friction post “Liberation Day,” Chinese equities rebounded, supported by optimism around innovation-led growth, particularly after the launch of DeepSeek’s breakthrough AI model. While macro data softened later in the year, sentiment improved materially, as a temporary tariff truce between the US and China eased investor concerns. Global interest in China’s technology and AI ecosystem, alongside rising participation from retail investors, drove increased trading volumes and provided further momentum to the market. Meanwhile, market focus shifted toward sectors benefitting from innovation and AI development, such as technology, healthcare, banks, and commodities, causing valuation dispersion.
Precision Tsugami advanced after reporting a strong improvement in profits and revenue, supported by healthy margins and robust demand for high-precision machine tools. An underweight position in Meituan proved rewarding as the stock declined due to falling margins amid intense price war in food delivery business. Conversely, an underweight position in Alibaba weighed on returns as Chinese technology stocks had a good run with the AI enthusiasm. The holding in Tuhu car held back gains amid intensifying industry price competition and a subdued outlook for the auto sector.
Over the 12 months to 31 December 2025, the Trust’s NAV increased by 33.9%, outperforming the index, which delivered 22.1% over the same period. The Trust’s share price increased 40.2%.
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.
