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LONDON (Alliance News) - Fidelity China Special Situations PLC said Friday it underperformed against its benchmark in the first half of its financial year, due to sharp mark downs on investments and an underweight energy sector position.
For the six months ended September 30, the China-focused investment trust posted a net asset value per share total return of negative 9.1%. Its benchmark, the MSCI China Index, posted a negative 4.0% total return for the same period.
The trust said its energy sector position was particularly underweight as higher oil prices boosted companies such as CNOOC Corp and PetroChina Co Ltd.
Moreover, the investor's holdings in e-commerce platform Vipshop Holdings Ltd and software firm Kingsoft Corp Ltd both saw a marked drop in value in the period.
Fidelity China Special Situations said it has been investing "very selectively" in A-share industrial companies after A-shares were included in the MSCI Index. These investments include artificial intelligence and surveillance, which it believes have strong prospects for growth despite their currently low valuations.
Looking ahead, the company's portfolio manager, Dale Nicholls, said that he was "confident of long-term growth" for the portfolio.
Shares in Fidelity China were down 1.4% at 191.27 pence on Friday morning.