12th Jun 2018 11:59
LONDON (Alliance News) - Fidelity China Special Situations PLC said Tuesday that in its most recent financial year it had marginally underperformed against its benchmark, the MSCI China index, due to the disproportionate weighting of certain stocks within the index.
Nonetheless, the Chinese investment company saw sharp rises in both its net asset value return and NAV per share for its financial year ended March 31.
The MSCI China index benchmark NAV total return was 24% and Fidelity China came just short of this at 22%.
As at March 31 NAV per share stood at 272.55 pence, up from from 225.36p the previous year.
Fidelity China will increase its dividend by 40% to 3.50p from 2.50p the previous year.
There were two internet stocks that caused issues within the MSCI China index: Tencent Holdings and Alibaba Group. Their strong performance combined with their disproportionate index weighting created issues with the index itself, and it is currently being amended, according to Fidelity China.
Moving forward, Fidelity China will reduce the fees it pays to its investment manager Fidelity. The headline annual fee will be reduced to 0.9% of net assets from 1.0%, effective from July 1, while the annual administration fee will be cut to GBP100,000 from GBP600,000, effect from from this past April 1.
The company has a strongly positive outlook, particularly regarding the Chinese market as a whole.
"Even the lowest estimates of China's forecast economic growth are in excess of the developed markets in the West. I remain confident in the long-term future of the company," said Fidelity China Chairman Nicholas Bull.
Shares in Fidelity China Special Situations were up 1.4% at 267.25p on Tuesday.
Related Shares:
Fidelity China Special Situations PLC