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Bolton reveals strategy of new China fund

Anthony Bolton says he would consider placing a cap on his forthcoming Fidelity China fund if inflows exceed expectations.

Bolton says he has a figure in mind for expected inflows into the vehicle, which will come to the market next March. Asked if there were plans to cap the fund, he said: “There is a maximum amount of money I would like to run, so yes.” Fidelity says the details of the fund are being finalised and it could not yet confirm whether the cap will be in place on the launch date.

Bolton says he intends to apply the management style he used for almost 30 years on the special situations fund, now managed by Sanjeev Shah. The main difference between the new portfolio and Fidelity’s existing China products will be its more aggressive approach. “The key thing is that I am running it in a style I expect to be similar to special situations,” he says. “Broadly I would expect it to have a higher tracking error.”

The biggest allocation special situations ever held in Chinese stocks during Bolton’s tenure was about 5 per cent over the course of three years. But Bolton says his stockpicking skills will transfer into the Chinese market although he has never run a pure China fund before.

“I started going to China is 2004, and for three years I had Chinese stocks in Special Situations. I visited the country twice a year and I have continued to do so. I have seen 40 companies in the last three months. Do I have the experience? Not as much as others running a China fund, but I have a lot of experience running money and I think experience running money is what is important,” he says.

“Some people say [my style of stockpicking] won’t work because you have to do things differently in China. My contention is I don’t believe that. That local managers are short-term traders is just because the market is not mature yet.”

Fidelity Special Situations peaked at £5.4 billion in assets under management before it was split into two separate portfolios in 2006.

For more on this story see next week’s issues of Fund Strategy and Money Marketing.

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