I wonder if Anthony Bolton has a financial planner? His return to fund management after stepping down from Fidelity’s well-known Special Situations fund must have been driven more by hubris than a need to return to work.
I am sceptical of new investments, so steered clear of Bolton’s Fidelity China Special Situations investment trust when it was launched – our committee normally requires at least a three-year track record. Initially Fidelity’s gamble on Bolton’s celebrity status seemed to reap rewards – the share price originally rose by 20 per cent.
Another common feature of investment trusts, the discount, soon came into play, and presently the fund trades at 10 per cent under the net value of the trust’s assets. The transition to the new manager, Dale Nicholls, seems organised, but so was the move from Bolton when Special Situations was split – Fidelity still suffered redemptions.
Maybe Bolton has been unlucky, growth in China has slowed. But therein lies the danger of treating a fund manager like a guru. Success with the Special Situations fund does not necessarily commute to the new Chinese fund.
In trying market conditions maybe we should turn our back on the star manager altogether – after all, by most measures even a star like Bolton has underwhelmed. The only aspect we can control reliably is cost so maybe the panacea might be passive management?
Alistair Cunningham is financial planning director at Wingate Financial Planning
