12th Nov 2013 13:25
LONDON (Alliance News) - Fidelity China Special Situations PLC Tuesday said it substantially outperformed its benchmark over the six months to September 30, as its net asset value per share gave an 11% total return over the period, compared with a 1.9% fall by the MSCI China Index in sterling terms.
The company's NAV per share was 106.59 pence on September 30, an increase from the 97.09 pence reported for March 31.
Anthony Bolton, portfolio manager, said the results were buoyed by the good performance of Chinese internet companies and US-listed Chinese companies, after increasing the portfolio's exposure to such companies a year ago.
"It is good to see the factors that hindered performance in the past, the exposure to smaller private companies and the portfolio's borrowings, are now working to shareholders' advantage. I am strongly of the view that simply buying exposure to the index in China will not be as rewarding as buying an actively managed fund with an emphasis on the generally smaller privately run companies that I believe will lead China's growth over the next few years," Bolton said in a statement.
Chinese internet companies have done well in light of the upcoming IPO of China's leading e-commerce company, Alibaba, with some brokers forecasting a market capitalisation of over USD100 billion, according Bolton, though though he said the IPO is more likely to occur in the US than in Hong Kong.
"We purchased a holding in Alibaba convertible shares in 2012 at a market capitalisation equivalent of USD48 billion and, although a partial revaluation has taken place to a capitalisation of USD64bn, hopefully this still leaves good upside. Alibaba is one of the most exciting companies I've come across in my career with its dominant position in e-commerce in China. It is very profitable and has a cash generative platform model," Bolton said.
Fidelity China Special Situation shares were Tuesday quoted at 101.07 pence, up 0.3%.
By Samuel Agini; [email protected]; @samuelagini
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