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
Start your day with The Independent, sign up for daily news emails
News
election 2015The 10 best quotes of the campaign
News
A caravan being used as a polling station in Ford near Salisbury, during the 2010 election
election 2015The Independent's guide to get you through polling day
News
people
Voices
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month
voicesWhat I learnt from my years in government, by the former Home Secretary David Blunkett
ebooks
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'