Bolton doubles stake in HSBC

Fidelity's Anthony Bolton has doubled his holding in banking giant HSBC within his China Special Situations investment trust.

Bolton, who has backed the bank throughout much of the year, doubled his position from around 2.5% in August to 4.9% by the end of September.

The move makes HSBC Bolton's second largest holding in his investment trust and comes following a sell-off in the bank's shares.

Amid a decline in banking shares across the globe, HSBC's Hong Kong listed shares are down around 22% in the last six months, currently trading at 65.45 Hong Kong Dollars.

Meanwhile in London, shares are off around 20% compared to six months ago, trading at 530p currently, down from 658p. However, they have recovered from lows seen after the recent market sell-off, having hit a trough of 473p.

Bolton has previously said he is backing Hong Kong listed banks - including HSBC - over banks listed on the Chinese mainland within his £516m trust.

In an interview in April he said: "Where I am overweight right now is on Hong Kong banks, which I think are in quite a different position from the mainland banks."

The trust has around 25% invested in financials according to his latest factsheet, which includes banks as well as property companies.

Other banks currently in the trust's top ten include Bank of China Hong Kong.

Bolton's trust has outperformed amid the recent rally in markets, delivering a 5.8% total return in the last month (according to Trustnet, to 25 October) compared to the Country Specialist Asia Pacific index loss of 0.3%. However, the NAV has fallen 4.7% over the period.

Over longer periods the trust has lagged the index, with both total returns and NAV off around 36% over one year, compared to the index decline of 25%.

Bolton said in his latest commentary the trust had underperformed in September, primarily because of "gearing and stock selection in consumer discretionary, energy and telecom services sectors".

He added: "A lack of exposure to China Mobile and certain oil and gas producers, as well as high conviction holdings in select retailers and an automobile manufacturer were among the key detractors."

However, he noted financials holdings had helped to mitigate some of the losses.

The trust's board recently took steps to close the discount on the trust after launching a share buy back programme.

It bought back 100,000 of its own shares at a price of 83.25p per share, in a bid to reduce the company's discount from 4.3%.

The move has helped reduce the discount to just 0.25%, according to Trustnet.