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Monday, 17 June 2013

Bolton Throws in the Towel After 'Disappointing' China Returns

 (CW8888: Do we realize how tough is investing over long run to maintain consistently good performance till retirement?)

Renowned investor, Anthony Bolton is set to retire from Fidelity next year after three decades working in the fund management industry, ending his career with what he described as "disappointing" returns for investors after his bullish views on China failed to pan out.

Bolton, who managed a U.K. based special situations fund for 28 years consistently outperformed the benchmark until his retirement. In 2010, he returned to fund management to run a China-focused fund, but struggled to produce results, losing investors 13.85 percent since launch against the MSCI China index which has fallen 6.4 percent over the same period.

His retirement comes as disappointing industrial output and export growth signaled a sharper-than-expected slowdown for the Chinese economy. Bolton however insisted this wasn't the reason for his decision to retire.

"The timing of my retirement does not relate to anything to do with the background of the Chinese economy. Once the bears see China will not blow up in the short term and there will not be a financial crisis, the environment will improve. With its gearing and exposure to small and mid-caps, the fund should do better but, as with any investment it is not guaranteed."
Bolton's views reflect Fidelity's steadfast bullish outlook for the nation, which urged investors not to "ignore an economy of China's importance."

"The growth in China should now come from the increase in wealth of the growing middle class and a growth in domestic consumption. Over time an investment in Chinese equities should generate a good return for shareholders," John Owen, chairman of Fidelity China Special Situations said.

Bolton will be replaced by Dale Nicholls, manager of the group's offshore Pacific fund since 2003.

"We selected Dale to continue the research-driven stock-picking approach which we continue to believe is the route to success in this exciting market," said Owen.

Asked about the 2010 decision to return to fund management with the launch of the trust, Bolton said "I do not regret it at all."

"Obviously I'm disappointed with the performance so far. China has been a more disappointing part of the world than I had been expecting," he added.

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