Anthony Bolton says “the golden era for Chinese exports is coming to a conclusion” and has bet on the Chinese consumer outperforming heavy industries.
The president of investments at Fidelity International has positioned his Fidelity China Special Situations investment trust towards financials, retailers, service businesses, pharmaceuticals, beverages, autos and other consumer themes after a year-long fall in the A share market.
However, he reiterates his belief the new bull market will not be driven by commodities, heavy manufacturing and exports and was underweight those themes in his fund.
“The golden era for exports is coming to a conclusion. It’s now going to be very much more the domestic economy and the domestic consumer which is going to drive the market,” he says.
As predicted, he has taken advantage of having a fixed pool of capital in a closed-ended structure to invest in less liquid small and mid-cap companies, which he feels are often under-researched and mis-priced.
However, he described corporate governance as “variable” and says investors need to perform careful due diligence.