Anthony Bolton has pledged his future to Fidelity’s troubled China Special Situations fund.
Bolton has said he will continue to manage the fund until at least 2014 in the hope that its fortunes can be turned around.
Poor performance
The fund, which is worth over £500 million, had a poor 2011, losing around 30%, and was ranked in the bottom 25% of all similar funds.
Bolton has admitted that disappointing performance has been a factor behind his decision to stay on for at least two more years.
The fund was launched two years ago with the aiming of providing a return based on the long term growth potential of China. The majority of the investments made by the fund are in Chinese companies, quoted either on their home exchange or in Hong Kong, however shares in companies with significant interests in China and Hong Kong are also bought.
Since launch the fund has produced a loss of around 20%, somewhat denting Bolton’s reputation as a ‘star’ fund manager, which he made by managing the hugely popular Fidelity Special Situations fund.
Mr Bolton said: “I’ve been disappointed and performance has been a factor in my decision. It has been the worst condition I have ever managed money in. Hong Kong had a terrible year and suffered more than most markets.”
Stronger due diligence
Mr Bolton said that his team would tighten up their due diligence process having been the victim of several “reverse takeovers”.
He said: “I employ four or five private companies to do due diligence to back up our own research and some stocks have now been excluded from the portfolio.”
Bolton continued: “I’m a still bullish on China, not in the short-term, but on a one to two year view. I still believe in the trust.”
