View more on these topics

Winterflood warns investors over Bolton’s Fidelity China Special Sits

Anthony Bolton

Winterflood Investment Trusts has issued concerns over Anthony Bolton’s Fidelity China Special Situations trust, questioning its suitability for retail investors.

The £482.2m trust has underperformed its benchmark since launch in April 2010, with its net asset value falling 23 per cent compared with the 14 per cent decline seen in the MSCI China index.

The underperformance, which Bolton has described as “disappointing”, has been attributed to a bias to small- to mid-caps and the trust being geared in a falling market.

Winterflood says the fund’s level of gearing, which stands at about 20 per cent, adds “substantial risk” to the portfolio. Winterflood adds that the manager’s use of hedging creates complexity around the fund and dilutes its investment message.

Winterflood says: “Although we would expect the fund to perform strongly in a bull market, due to its gearing and mid/small cap bias, we would question the suitability of this fund for the retail investors.”

Fidelity declined to comment.

Whitechurch Securities managing director Gavin Haynes says his firm did not recommend the trust at launch as it would take time to see if Bolton could translate his performance in the UK into the Chinese stockmarket. Haynes adds: “Performance over two years has not done anything to change our view.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com