Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for October 2025.
Portfolio Manager Commentary
After a volatile start amid renewed US–China trade tensions, markets rebounded as a temporary truce eased geopolitical concerns. Optimism around China’s technological progress—boosted by DeepSeek’s AI breakthrough—revived interest in innovation-led sectors. Improved sentiment and strong retail participation provided ample market liquidity and a broad valuation re-rating. Policy remained supportive yet measured, with authorities favouring targeted stabilisation over large-scale stimulus. Meanwhile, market focus shifted toward sectors benefitting from innovation, AI development, and the government’s “anti-involution” campaign, contributing to market consolidation and a healthier long-term market environment.
Hesai Group saw significant growth after announcing plans to scale its production to meet rising demand for LiDAR technology. An underweight position in Meituan proved rewarding as the stock declined due to intense price wars and falling margins. LexinFintech also contributed notably amid interest from institutional investors and solid earnings. 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 cautious consumer spending and a subdued outlook for the auto sector.
Over the 12 months to 31 October 2025, the Trust’s NAV increased by 48.8%, outperforming the index, which delivered 30.8% over the same period. The Trust’s share price increased 55.0%.
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.
