Go or stay? Bolton keeps them guessing

It's crisis time for fund manager Anthony Bolton, as his China trust struggles in its sector. But does he regret coming out of retirement and moving to Hong Kong?

Will he or won't he? The question that famed fund manager Anthony Bolton refuses to answer is the one about his future. But it's the key issue for his many fans and followers. Will he still be manager of the Fidelity China Special Situations investment trust after April 2013?

That date was set by Mr Bolton himself when he came out of retirement in 2010 and moved to Hong Kong to launch the China fund. At the time he said he would manage the new fund until at least April 2013. That "at least" gives him the option of a second retirement at the top. But only if his Chinese hunch proves correct.

However, so far his £580m fund has proved a massive disappointment. It lost 34 per cent of its value last year while languishing fifth out of the six investment trusts in its sector.

That's hardly the performance figures you'd expect from the small company specialist. After all, he achieved consistent growth of 20 per cent a year for 28 years while managing the Fidelity Special Situations fund until December 2007.

His management skills consistently outperformed the index, meaning anyone who stuck with him would have seen a £1,000 initial investment grow to £147,000 by the time he retired.

So he's risked his reputation by returning to management. And, to date, the prospects don't look promising.

But that's all about to change, he told The Independent. Mr Bolton believes that China is already in recovery.

"Something quite important changed in China in November," he said. "For most of the time I've been out there, the authorities have been tightening monetary policy. But in November they cut what is known as the reserve rate requirement for banks, and then cut it again this month."

He said the move was important because periods of easing are good for stock markets.

"It creates a much more favourable background for stock markets," he said. "Inflation has also fallen, to 4.5 per cent from 6 per cent, which helps."

But he also said the improving global economic position would help.

"I'm generally optimistic about world stock markets, and China is part of that.

"What's important in my business is not what the outlook is like, it's what outlook is discounted in prices.

"There are challenges out there, but I think that has already been reflected in prices."

His move to Hong Kong surprised many as he can't speak Mandarin or Cantonese. So how does he communicate with Chinese company bosses?

"Language has never been my strong subject," he admitted. "When I managed Fidelity Special Situations I had to have a translator when I met companies in southern Europe, for instance. I do the same now, although half the meetings are actually in English."

His China adventure has brought some surprises. "I didn't expect the market to be as bad as it was last year," he said. "The volatility in the Hong Kong market was as bad as anything I've seen in my career. In August and September big cap stocks were going up and down by 10 per cent a day, which I've never experienced before."

He invests in small to medium-sized firms and has around 110 stocks in his portfolio. These can be riskier than large corporates, and he's been hit harder than the other funds in his sector, which predominantly invest in large caps.

But Mr Bolton thinks the potential rewards are worth it. Indeed, he believes the recovery in Chinese stocks is already reflected in large cap companies, but has yet to hit the smaller ones in which he's invested. He also says he will benefit from falling inflation.

If he's right, and his fund starts to outperform the rest of the index, his decision to come out of retirement will be vindicated. But that is the short-term. Investors remain worried about what will happen to the fund next year.

So will Mr Bolton retire in April 2013,? "I can't answer that yet," he said. "All I can say is that I'll be there until at least April 2013 and before our annual general meeting in July I will say whether I'm stopping or going on. I'm considering different factors."

Factors that may be weighing upon him include, obviously, his desire to be seen to be a success.

Delaying making a decision until July gives him a bit of breathing space to see if his fund has turned the corner. If it has then you suspect that some of the other factors preying on his mind may encourage him to retire for a second time and return to England.

For starters there's the dog he left behind in his Sussex home, being looked after by a housekeeper. He admits it was a wrench to leave it behind when he and his wife moved to Hong Kong.

Then there's his love of classical music. The lack of cultural attractions out there – there's no Opera House, for instance – can weigh heavily and, while he has kept his compositional hand in by setting some ancient Chinese poetry to music, you sense that his soul isn't getting as much cultural nourishment as it has been used to.

But then we return to his professional pride which is currently out on a limb.

"I still strongly believe that at some stage over the next few years China will be the place to be," Mr Bolton said.

Will it still be the place for him to be? We'll find out in July.

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
musicBand's first new record for 20 years has some tough acts to follow
News
peopleAt least it's for a worthwhile cause
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Life and Style
Sexual health charities have campaigned for the kits to be regulated
healthAmerican woman who did tells parents there is 'nothing to be afraid of'
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments