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Dampier concern over investment trust choice for Bolton China fund

Bolton: Gearing ability
Bolton: Gearing ability

Hargreaves Lansdown head of research Mark Dampier has expressed concern at news that Fidelity fund guru Anthony Bolton will be launching his new China fund as an investment trust.

Fidelity confirmed the move last week, with the company also registering a China special situations company at Companies House on January 22. Bolton said in December that the benefit of a closed-ended structure is that it will cap the fund’s assets because he wants a limited amount he can control in the fund. He also likes the fact that being structured as an investment trust provides him the ability to gear the portfolio.

However, Hargreaves Lansdown head of research Mark Dampier has concerns over the fund being offered in a closed-ended structure, citing a limited investment window in what is a more complicated investment structure.

He says: “You also have to deal with the fact that it will probably launch at a premium, so you probably will not want to buy at launch but wait for a later date and Anthony has only committed to two years on the fund.”

Chelsea Financial Services managing director Darius McDermott says: “I would not be overly concerned about the structure as Anthony has a proven track record of running investment trusts at Fidelity with the likes of the special values trust. A lot depends on the detail that gets unveiled on the fund in early February.”

Long View sole trader John Blackmore says: “I like Anthony Bolton and I think something as aggressive as a Far East type fund should be in a closed-ended structure so the manager does not need to be forced to sell in a downturn. Both the UK special sits and European offerings have done well since he came off them. I do not believe in the myth of following the manager.”

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