Should Bolton's investors be scared off by poor performance?

ANTHONY BOLTON

Fidelity's legendary fund manager Anthony Bolton last week revealed his China Special Situations trust continued to struggle in the face of a wider market sell-off.

Its NAV fell 18.5% in the 12 months to the end of March while the share price was down 26.3%. Bolton, one of the most widely-respected fund managers of his generation, has endured a difficult market since returning to run the trust, and gearing has increased the impact of market movements in the past year. Crucially, the trust has lagged the MSCI China benchmark by 6%, but to be fair to Bolton, this index misses much of what the manager is trying to capture. Bolton’s trust is trying to buy the smallest, least liquid, and therefore highest risk stocks in the market, with only 22% in...