'Brutal period' for China investments: Anthony Bolton, fund manager

LONDON: Fidelity China Special Situations' first-half results reflected "as difficult a time to be running money as I can remember," according to Anthony Bolton, the UK's most successful fund manager. The fund's net asset value plunged 29% in the six months to September 30 while its benchmark, the MSCI China Index, fell 25%, it said on Monday in a statement. The investment trust's share price dropped 31% in the period.

"The few weeks leading up to September have been a brutal period for Asian markets - as difficult a time to be running money as I can remember," Bolton, 61, said. His optimism on China "has been severely tested".

During the 28 years, he managed as much as $12 billion in the UK-focused Fidelity Special Situations fund, Bolton delivered average annual returns of about 20% - so that £10,000 ($15,950) invested in 1979 became £1.5 million in 2007, according to Morningstar. The closed-end China fund was launched in April 2010.

Problems in China have included food inflation, bad bank debts and falling house prices, Bolton said. The results were also hit by difficult stock markets and "more volatile" medium and smaller company investments, the statement said.

"I have asked myself whether I should revise my view in light of the deteriorating position in Europe and potentially also in the US, but I have concluded that the world is not in such a bad position," Bolton said in the statement. "It may still end up there at some stage over the next year or so, but I believe the balance of probabilities is against such an outcome."