Fidelity China (FID0011AU) Report & Performance

What is the Fidelity China fund?

Fidelity China Fund seeks to achieve returns in excess of the MSCI China Index over the suggested minimum investment time period of five to seven years.

  • The Fund generally invests in a diversified selection of Chinese Securities.
  • Invests into typically between 70 to 80 Chinese companies.
  • Uses a bottom-up stock selection process that focuses on quality business models and management teams out of favour due to short-term macro reasons.
  • In-house, bottom-up company research.
  • Seeks out stocks that it believes are undervalued and likely to generate growth.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For Fidelity China

Fidelity China Fund Commentary June 30, 2023

BOC Aviation gained following recent upbeat management guidance on the demand outlook for aircraft leasing. The company has a long runway for growth, with solid leasing demand for aircraft against relatively tight supply, net lease yield recovery and an expansion in new growth opportunities. The increasingly lower financing rate received by BOC Aviation versus its closest peers implies that the company is likely to gain market share via potential industry consolidation among top tier lessors. Sinotruck Hong Kong advanced on expectations of solid demand growth in the HDT industry. The company is expected to benefit from potential re-opening recovery, which is likely to have a positive impact on HDT sales in the near term. Also adding value were our positions in PetroChina and China Petroleum and Chemical Corporation. Despite crude oil price decreased during the period, PetroChina managed to maintain stable gas margin, attributing in part to China domestic gas price reform, while China Petroleum and Chemical Corporation remains defensive with stronger than expected refining oil business recovery.

China Yongda and Zhongsheng Group slid due to weakening auto demand and intensifying price wars from EV sales in China. Nevertheless, we retain conviction in China Yongda, as it has a robust balance sheet with solid cash flow and as management is willing to return capital to investors. Moreover, its current valuation offers a high margin of safety. In addition, the growth of used car sales should offset some of the margin pressure on new cars. For Zhongsheng, margins for new cars appear to have bottomed out, while aftersales services remain intact and offer a solid cornerstone for profits.

READ HISTORICAL PERFORMANCE COMMENTARIES

Product Snapshot

  • Product Overview
  • Performance Review
  • Peer Comparison
  • Product Details

Product Overview

Fund Name APIR Code
? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.
Structure
?
Asset Class
? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.
Asset Category
? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.
Peer Benchmark Name
? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.
Broad Market Index
? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.
FUM
? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.
Management Fee
? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.
Performance Fee
? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.
Spread
? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
Fidelity ChinaFID0011AUManaged FundsForeign EquityAsia Pacific w/o JapanForeign Equity - Asia ex Jap IndexWorld Emerging Markets Index68.16 M1.2%0.00%0.8%

Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Fidelity China-4.11%-10.77%-10.99%-1.58%9.67%16.47%21.98%18.7%-18.77%-23.94%-45.01%

Peer Comparison

Fund Name Peer Index Name
? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.
12 Months Excess Return
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
Excess Return Annualised Since Inception
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
12 Months Alpha
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
Alpha Annualised Since Inception
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
12 Months Beta
? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Beta Annualised Since Inception
? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
12 Months Tracking Error
? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
Tracking Error Since Inception
? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
12 Months Correlation
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Correlation Since Inception
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Fidelity ChinaForeign Equity - Asia ex Jap Index-9.33%1.7%-0.58%0.06%0.06%1.59.33%8.94%0.890.89

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
Fidelity ChinaYes-https://www.fidelity.com.au/-

Product Due Diligence

What is Fidelity China

Fidelity China is an Managed Funds investment product that is benchmarked against World Emerging Markets Index and sits inside the Foreign Equity - Asia ex Jap Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Fidelity China has Assets Under Management of 68.16 M with a management fee of 1.2%, a performance fee of 0.00% and a buy/sell spread fee of 0.8%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the Fidelity China has returned -4.11% in the last month. The previous three years have returned -1.58% annualised and 18.7% each year since inception, which is when the Fidelity China first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Fidelity China first started, the Sharpe ratio is 0.43 with an annualised volatility of 18.7%. The maximum drawdown of the investment product in the last 12 months is -18.77% and -45.01% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Fidelity China has a 12-month excess return when compared to the Foreign Equity - Asia ex Jap Index of -9.33% and 1.7% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Fidelity China has produced Alpha over the Foreign Equity - Asia ex Jap Index of -0.58% in the last 12 months and 0.06% since inception.

What are similar investment products?

For a full list of investment products in the Foreign Equity - Asia ex Jap Index category, you can click here for the Peer Investment Report.

What level of diversification will Fidelity China provide?

Fidelity China has a correlation coefficient of 0.89 and a beta of 1.5 when compared to the Foreign Equity - Asia ex Jap Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on Fidelity China and its peer investments, you can click here for the Peer Investment Report.

How do I compare the Fidelity China with the World Emerging Markets Index?

For a full quantitative report on Fidelity China compared to the World Emerging Markets Index, you can click here.

Can I sort and compare the Fidelity China to do my own analysis?

To sort and compare the Fidelity China financial metrics, please refer to the table above.

Has the Fidelity China been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in Fidelity China?

If you or your self managed super fund would like to invest in the Fidelity China please contact via phone or via email .

How do I get in contact with the Fidelity China?

If you would like to get in contact with the Fidelity China manager, please call .

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the Fidelity China. All data and commentary for this fund is provided free of charge for our readers general information.

Historical Performance Commentary

Performance Commentary - March 31, 2023

The Fund delivered 9.6% net of fees, while the index returned 6.0%. Robust stock selection in the Chinese consumption and information technology sectors enhanced gains. An overweight stance in energy also added value. Conversely, an underweight allocation to selected names in communication services weighed on returns. Within internet sector, an underweight stance in online services platform Meituan and e-commerce company JD.com added relative value. In addition to geopolitical turmoil, investors remained concerned over intensifying competition and potential margin pressure in the Chinese ecommerce space, which led to a selling spree during the quarter. Elsewhere in energy, shares of PetroChina and China Petroleum and Chemical Corporation took gains amid recent OPEC oil production cut and an uptick in demand due to recovery in China. Holdings in internet search engine related companies Baidu and Zhejiang Dahua Tech gained on news flows that they have set up a development team to work on a ChatGPT-like chatbot. The subsequent supportive statements from China’s Ministry of Science and Technology, which expressed its desire to push for the integration of artificial intelligence into Chinese society and economy, buoyed sentiment towards these stocks. On contrary, an underweight stance in Tencent and NetEase weighed on relative returns. Their share price was further boosted as the technology giant received new game licenses from the Chinese regulators earlier in the year. This strengthens the view that the official rhetoric turned notably more positive, suggesting that regulatory pressure on the gaming sector has somewhat eased, and the industry will therefore experience a cyclical uptrend going forward. Chinese automobile dealers China Yongda and Zhongsheng Group declined following weaker overall automobile demand in China, rising production costs, fading automobile subsidies and intensifying price wars.

Performance Commentary - January 31, 2023

Performance Commentary - December 31, 2022

The Fund delivered 8.2%, while the index returned 7.6%. Robust stock selection in industrials and materials enhanced gains. An overweight stance in consumer staples also added value. Conversely, selected names in communication services weighed on returns.

Conviction holdings added value
Conviction positions in China and Hong Kong, including Focus Media Information Tech and Sinotruk Hong Kong, saw a trend reversal of sorts amid hopes of an economic re-opening. Furthermore, Focus Media announced a special dividend, highlighting its management’s commitment towards its shareholders. Zhaojin Mining added value after it announced that mining company Zijin Mining has initiated a partnership in its offshore project. Furthermore, an improving outlook for gold prices over the quarter and a slowing rate of interest rate increases as indicated by the US Federal Reserve boded well for the stock.

Underweight in Chinese consumption names contributed
The internet sector suffered heavy losses amid regulatory concerns following the announcement of China’s new leadership team earlier in the quarter, as investors remained cautious over the country’s common prosperity goals. Against this backdrop, the underweight stance in online services platform Meituan and China’s second largest ecommerce platform JD.com added relative value. Meituan also faced selling pressure after its key stakeholder Tencent Holdings announced that it would divest its stake in the food delivery major. Likewise, not holding electric vehicles (EV) manufacturer NIO enhanced relative gains, following ongoing concerns over demand momentum for EVs in China, which is the world’s largest EV manufacturer.

Performance Commentary - September 30, 2022

Preferred holdings in real estate and health care added value The position in medical consumables supplier Shandong Weigao advanced after it reported robust revenues for the quarter and improved efficiency in its cost management. The company has diverse business lines, making it resilient against various policy changes and risks. Shares in housing transactions company KE Holdings supported performance as it reported healthy results. A positive outlook for company-operated Beike, a platform for housing transactions and services, further buoyed investor sentiment.

Overweight allocation to energy sector proved rewarding The position in energy enterprise China Shenhua Energy added relative value. The firm offers a desirable investment target due to the sector’s modest valuation, relatively high dividend ratio and increasing coal prices. The stock generates robust free cash flow yields and has a significant cash balance, which it uses to pay attractive dividend yields.

Selected positions and underweight stance in growth names held back gains An underweight allocation to consumer discretionary company Meituan detracted from performance. Investor confidence strengthened as it delivered better-than-expected quarterly results. It also reported resilient delivery service and narrowed new initiative losses. In addition, the position in China Merchants Bank fell as the sector suffers from weak loan demand from its corporate and retail client base given the slowdown in the economy.

Performance Commentary - June 30, 2022

The position in housing transactions and services platform KE Holdings gained on better than expected results in the first quarter. It reported profits, beating consensus expectations of a deep loss. Shares in China Life Insurance rose as its valuations turned attractive. The position in Zhuzhou CRRC Times Electric benefited from supportive policies for new energy vehicles, as it is a major supplier in the electric vehicle (EV) supply chain. Shares in Hansoh Pharmaceutical advanced as investors looked for defensive businesses with strong balance sheets in the current volatile environment.

The underweight allocation to Meituan and not holding JD.Com detracted from performance as their shares advanced on expectations of a recovery in consumption following the re-opening of major cities and reduced mobility restrictions. Not holding automobile manufacturers BYD and Li Auto proved unfavourable as their shares rallied following indication that China would extend purchase tax exemptions for new energy vehicles.

Performance Commentary - March 31, 2021

The Fund’s outperformance was driven by the sector rotation into selected value-oriented high-quality stocks in which the fund holds an overweight position. Preferred holdings outperformed The position in Lenovo gained on the back of improving fundamentals, which drove strong share price performance. In addition to sustained high demand for personal computers, its service business is gaining traction, which bodes well for higher margins and better earnings visibility than pure hardware sales. The server business is bottoming out and Lenovo is well positioned to capture the uptrend with its best in class product and software suite. Preferred holdings in China Mobile and CNOOC, which were negatively impacted by geo-political tensions and lagged the growth rally in 2020, rose over the quarter as investors favoured their strong fundamentals and attractive valuations

Performance Commentary - February 28, 2021

Invests in 70 to 80 Chinese companies and draws on the research capabilities of Fidelity’s analysts based on the ground in China and Hong Kong. The Portfolio Manager is aware of the macro environment and policy changes, but believes bottom-up company specific research adds the most value when investing in China

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