Fidelity China Special Situations is a £1.5bn portfolio of Chinese equities, structurally tilted to the domestic Chinese economy, in particular small- and mid-caps in the consumer and technology industries.
The trust is a high-octane one, with structural gearing worth 10% of NAV and a track record of maintaining borrowings closer to 25%. Along with the SMID exposure and the interest in private companies, this is not a trust for the short-termist or faint-hearted.
The trust has outperformed over the medium term and managed to keep pace with the 2017 rally despite being underweight the large stocks that led the charge. A yield of 1% is not high but has been growing at a significant pace.
The trust has traded on a double-digit discount since late 2012, when the emerging markets region fell out of favour. The board has been targeting closing the discount through buybacks.
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Fund History: Fidelity China Special Situations
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