Fund manager Anthony Bolton succumbs to Chinese whispers

Don't panic over fund manager exit, say experts, but do think again about China investments

Legendary fund manager Anthony Bolton this week revealed that he will finally retire next April.

The 63-year-old will step down as head of the Fidelity China Special Situations after three years trying and failing to turn a profit from the world's fastest-growing economy.

What does it signal to investors, both those with holdings in his fund or in the Chinese sector?

The China fund lost a third of its value in its first year in 2010 and is still showing big losses. Meanwhile, the invest trust's share price has fallen by 10.4 per cent since its launch.

Last year, Mr Bolton told The Independent: "I didn't expect the market to be as bad as it was. The volatility in the Hong Kong market was as bad as anything I've seen in my career."

But he added: "I still strongly believe that at some stage over the next few years China will be the place to be." But if his fund does recover, Mr Bolton won't be a part of it.

This week he said in an interview: "It would be lovely to go out in a blaze of glory and everyone having made money and, obviously, I'm as disappointed as anyone that the fund hasn't done well."

Probably not as disappointed as the many thousands of small investors who rushed to back him in 2010 based on his exemplary record in charge of the Fidelity Special Situations fund, where he achieved growth of 20 per cent a year for 28 years until December 2007.

There could be a lesson there about not following fund managers, but does Mr Bolton's exit mean investors should rush to follow?

"I see no reason for existing investors to panic, particularly as the trust is already trading at a discount and redeeming their shares now will lock in any losses," says Darius McDermott of Chelsea Financial Services.

"Better, I think, to digest the news properly, make an informed decision in the coming months and, for those investing for the China story rather than simply because Anthony is running the money, give the new manager the benefit of the doubt in the new year."

The man taking over from Mr Bolton is Dale Nicholls, who has successfully managed the Fidelity Funds Pacific Fund since September 2003, returning 154 per cent compared to an index return of 117 per cent. In theory he is the right man to steer the fund in the years ahead, but until we know more about his plans, most experts are reserving judgement.

But what about the investment prospects for China?

Didier Rabattu, manager of Lombard Odier Investment Managers Emerging Consumer fund has just increased the fund's exposure there. Why?

"Investors can't afford to ignore China," he believes. "In population terms, it is as big as Europe and North America put together, and that population is young, growing quickly and increasingly wealthy. We have increased allocation to China since equities are starting to look good value again."

But Patrick Connolly of Chase de Vere is less positive. "There is huge investment potential in China as, despite a slowdown in economic growth, it continues to go from strength to strength," he says. "However, any growth will continue to be coupled with high levels of risk and volatility, so investors need to think carefully about how to invest in the region."

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
Life and Style
A teenager boy wakes up.
Life and Style
Researchers have said it could take only two questions to identify a problem with alcohol
food + drink
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
Life and Style
Arts and Entertainment
A still from Duncan Campbell's hour-long film 'It for Others'
Turner Prize 2014
Life and Style
food + drink
Arts and Entertainment
Tony Hadley in a scene from ‘Soul Boys Of The Western World’
musicSpandau Ballet are back together - on stage and screen
Arts and Entertainment
From left to right: Ed Stoppard as Brian Epstein, Sheridan Smith as Cilla Black and Elliott Cowan as George Martin in 'Cilla'
tvCilla review: A poignant ending to mini-series
Life and Style
Bearing up: Sebastian Flyte with his teddy Aloysius in Brideshead Revisited
lifePhilippa Perry explains why a third of students take a bear to uni
Arts and Entertainment
Sir Alan Sugar appearing in a shot from Apprentice which was used in a Cassette Boy mashup
artsA judge will rule if pieces are funny enough to be classed as parodies
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

    £300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

    Day In a Page

    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?
    Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

    Homegrown ballerina is on the rise

    Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
    Education, eduction, education? Our growing fascination with what really goes on in school

    Education, education, education

    TV documentaries filmed in classrooms are now a genre in their own right
    It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

    It’s perfectly reasonable to negotiate with villains like Isis

    So why don’t we do it and save some lives?
    This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

    Is a sub-2-hour race now within sight?

    Dennis Kimetto breaks marathon record
    We shall not be moved, say Stratford's single parents fighting eviction

    Inside the E15 'occupation'

    We shall not be moved, say Stratford single parents
    Air strikes alone will fail to stop Isis

    Air strikes alone will fail to stop Isis

    Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
    Witches: A history of misogyny

    Witches: A history of misogyny

    The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
    Shona Rhimes interview: Meet the most powerful woman in US television

    Meet the most powerful woman in US television

    Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
    'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

    Endangered communities photographed 'like Kate Moss'

    Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style