‘China via Bolton’. Congratulations to Fidelity for coming up with the wittiest headline for a while on an advert for a new fund launch.
But the 64,000 million dollar question – or is it 1.3 billion (the size of China’s population)? – is: are you going to buy into the fund?
Strangely, it feels a little like being back to the 1980s or even 1990s with fund launches like this, and, in itself, is a decent indicator that may result in many moving back in the direction of active fund management.
Of course, back in the 1980s we had privatisations, and how ironic it is to see the Conservatives suggesting the modern equivalent with the state-owned banks. More on this in next week’s Grouse, but for now let’s not confuse Bolton and China with a load of second-hand banks.
There are two reasons to buy the fund – Bolton and China. Obvious really, but do you have to buy both at the same time?
We could argue the toss all day long about the merits of China, and particularly whether it is an asset bubble or not, or the monetary policy of the Chinese authorities.
But the argument for China for me is a little like Russia: there are always good economic reasons to buy it, and good political reasons to avoid it. But successful investing is not so much about politics as buying when the opportunity is right and this for me in the most compelling reason to buy China and hold it for the long term – by which I mean north of 10 years and more likely 20.
It will be volatile, and the Chinese authorities will do things we in the West do not agree with, but there is no doubt the country now is a very different one from 20 years ago, but simplistically the Chinese have always been a trading dynasty and they are firmly back in that historical tradition.
I travelled through China 20 years ago and even in the most rural and apparently backward parts of the country local people wanted to trade. Shame the watches didn’t even last as long as the plane journey home.
None of that is particularly scientific in an analysis of the region, but instinct says it is the future driver of the global economy and investors would be silly to ignore it. So do you go with Bolton?
Of course, the man is a guru or a god or all those other stupid words associated with top fund managers, which are entirely inappropriate for such generally modest and intelligent people.
You should not buy the fund because you think Bolton is a genius (he is not; he is a very good investor who has made his money largely in Western markets). You should buy his fund because it is fantastic to see how enthused and excited he is about the opportunities he sees in the area and it is reminiscent of listening to him in the 1980s talking about Europe and to a lesser extent the UK equity market.
Buffett and Nils Taube are/were brilliant investors well into their seventies and eighties. Bolton is a mere slip of a schoolboy in age comparison, so I would be happy to go to China via Bolton any day of the week.
Lawrence Gosling is the founding editor of Investment Week. His views are his own, any comments to him at lawrencegosling@sky.com
