Following the announcement of the retirement of its star manager Anthony Bolton in April 2014, Fidelity China has released preliminary results for the year ended 31 March (release).
Over the past year the trust saw its net asset value and share price rise by 15.7 per cent and 15.0 per cent respectively while the MSCI China index was up by 12.2 per cent. The firm's shares have recovered slightly today after the announcement of Bolton's retirement to trade just above their last close.
The firm said that as the company aims to achieve long-term capital growth, dividends are not expected to "constitute a material element of the total return to shareholders", but under rules to qualify as an investment trust, it is required not to retain more than 15 per cent of its total income.
Some interesting points on what Fidelity China expects from Asian markets:
Investors should not underestimate the challenges facing the Chinese Government in rebalancing an economy the size of China's from an export-driven to a domestic consumption-focused one. However, the Board remains convinced of three things:
- That no investor should ignore an economy of China's importance and every portfolio should consider dedicating a portion of funds to investing in China;
- That the growth in China should now come from the increase in wealth of the growing middle class which would be evidenced by growth in domestic consumption; and
- That over time an investment in Chinese equities should generate a good return for shareholders.
Anthony Bolton commented on his departure and the proficiency of his successor:
It has always been my intention to step down as Portfolio Manager at some stage having been closely involved in the process of identifying my successor. I have now decided to retire on 31 March 2014 at the end of the Company's current financial year. I am delighted that my colleague Dale Nicholls will take over from me then. He has a similar investment approach to my own with a focus on medium and smaller sized companies and has been investing most successfully in Chinese companies for the last ten years.