Fidelity China notes "turbulent" start but remains upbeat in outlook

(Alliance News) - Fidelity China Special Situations PLC on Thursday published an update form its portfolio manager, Dale Nicholls, in which he described the year so far as "turbulent".

"It's been a turbulent start to the year so as we approach the mid-way point, I wanted to once again take the opportunity to share my perspectives on the market, and my outlook going forward," Nicholls said.

The portfolio manager said the China-centred investment trust is focused on ensuring the fundamentals - such as earnings visibility - of the companies it owns remain intact as they tackle slowing economic growth in China and recent lockdowns as the country maintains its zero-Covid policy.

"The risks from maintaining a zero-Covid policy need to be factored into one's risk reward assessment - I expect the short-term outlook for the consumer sector to remain difficult; and this is partly reflected in the trust's current underweight to consumer discretionary positions," said Nicholls.

Nonetheless, he explained that easier comparisons relative to the slowdown from the first half of 2021 mean that there is "considerable scope" to drive faster earnings growth in the market from the second half of 2022.

Shares in Fidelity China Special Situations were up 2.9% at 231.50 pence on Thursday afternoon in London.

By Heather Rydings; heatherrydings@alliancenews.com

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Fidelity China Special Situations PLC