(Alliance News) - Fidelity Asian Values PLC on Tuesday said that its half-year results had been marred by a relative overexposure to China and Hong Kong, only somewhat offset by an impressive performance from Indian and Taiwanese small cap stocks.
In the six months to January 31, the Asia-focussed investor's net asset value total return was negative 2.4%. This underperformed the firm's benchmark, the MSCI All Countries Asia Excluding Japan Small Cap Index, which returned 3.6% over the same period.
As at January 31, Fidelity Asian's NAV per share was 521.65 pence, down 5.0% from 549.33p in July.
While the firm said that its stock selection strategy made a positive contribution during the period, its results were hampered by market selection.
Fidelity Asian said that its overexposure to China and Hong Kong, where small stocks fell by 28% and 18%, respectively, dragged down its returns relative to the benchmark index.
"Since our investment process can lead us to take contrarian positions in undervalued businesses, our combined exposure to China and Hong Kong was close to its historical high (six month average of 40.6% versus the Index average weight of 13.0%)," Fidelity Asian explained.
Small cap stocks in India and Taiwan, however, rose by 27% and 9.6%, respectively, and four out of five of Fidelity Asian's top contributors were Indian companies in the period.
No dividend was declared for the interim period, unchanged from a year prior.
Shares in Fidelity Asian were up 1.0% at 511.00 pence each in London on Tuesday afternoon.
By Hugh Cameron, Alliance News reporter
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Fidelity Asian Values (FAS)