China Special Situation Fund - Fidelity UK

olulia

Any Fidelity UK China Special Situation Fund investors?
OK, so I made a huge mistake but now... at least rising to 90. Was far too stressful over the past year since I had no idea that this was such a volatile market. Should I just sell now while my losses have not been too great - or wait for a bit now that they are rising? I don't have any other plans to do anything with the money but put in a very low stress, safe savings plan. So, since I don't need the money now, should I wait and see if at least I can get back to original share price? Or just get out while I can, and have learned my lesson? thank you all, last time I wrote I got many very thoughtful and considered and experienced replies.

Jegersmart

Hi Olulia

I am not sure I understand your first sentence but for what it is worth I have been adding into China for the past 4 months and am currently over 12% up. China has been hammered for the past 2+ years and the signs last quarter were that a base was forming. I am not invested in the fund you mention preferring instead the Neptune China fund (mainly because it was hammered along with the indices but also because the manager has a very good record). About 18% of my holdings are now in this fund alone.

With regards to the Fidelity China SS Plc IT, it does seem to be underperforming against the benchmarks now that I look at it, perhaps you could diversify and put a portion of your holdings in another China focussed fund? I do like China and will probably hold for some time now unless things change.

HTH

J

westy22

I'm not anticipating any earth-shattering rises anytime soon but I think that the worst is probably over and that China is starting to see some green shoots of recovery so I am happy to stick with it at present. I hope that breakeven or maybe a small profit should be possible during 2013.

But then I am an optimist!

innovate

You are still only 2 years into your investment - that's no time at all. If you are convinced it will not recover and only stress you out if you keep it, may be you should sell at a loss now. But I fear you are at risk of making a typical newbie-investor error - i.e. panic sell instead of hanging on in there. You need to have a much longer horizon - at least another 2-4 years from now, preferably even longer.

Of course, I have no crystal ball and the fund may never perform well, or even recover to its launch price.

gadgetmind

olulia wrote: »

OK, so I made a huge mistake but now... at least rising to 90. Was far too stressful over the past year since I had no idea that this was such a volatile market. Should I just sell now while my losses have not been too great - or wait for a bit now that they are rising?

Sit tight IMO for at least a couple of years and spend that time reading about the importance of diversifying across territories and asset classes.

Done properly, investing is rewarding in both good times and bad and shouldn't scare you.

dunstonh

This is a very high risk fund with very high volatility. Typically shouldnt be more than 10% in even the highest risk portfolios. It has around 70% loss potential in a 12 month period.

It is a not a fund that should be held in isolation (ie no other investments) and not a fund for the feint hearted. It will rollercoaster in the short term but could sky rocket in the long term.

Jegersmart

dunstonh wrote: »

This is a very high risk fund with very high volatility. Typically shouldnt be more than 10% in even the highest risk portfolios. It has around 70% loss potential in a 12 month period.

It is a not a fund that should be held in isolation (ie no other investments) and not a fund for the feint hearted. It will rollercoaster in the short term but could sky rocket in the long term.

The point I made is that there should always be a reason for investing in a region. If that reason is still valid, especially when a price base has been formed and we have broken certain recent highs on the indices then I don't see this type of fund as "high risk" personally for the reason stated. Volatility is not a reason for concern with longer term investments like pensions (depending on age ofc) because the main risk as I see it is that one only achieves 3-4% per year until retirement which I would see as a complete failure. I realise that I am more agressive than most but when you look at this fund and its performance recently, there is almost no way that this fund has another 70% downside from where it is now unless the manager is dead. All imho.

J

dunstonh

The point I made is that there should always be a reason for investing in a region. If that reason is still valid, especially when a price base has been formed and we have broken certain recent highs on the indices then I don't see this type of fund as "high risk" personally for the reason stated.

The potential reasons why there may be an upside and good potential for gain does not make it lower risk. The volatilty that can occur with this type of fund is significant. They have had multiple periods where losses of more than 60% have occurred.

Volatility is not a reason for concern with longer term investments like pensions (depending on age ofc) because the main risk as I see it is that one only achieves 3-4% per year until retirement which I would see as a complete failure.

Volatility is always a reason for concern. However, it does become diluted over time. If the investor is going to be worrying after just 2 years after a period that has seen a relatively normal loss for that type of fund (peak to bottom was just a 43% loss. The fund is capable of a lot more than that) then you have to consider whether it is right for you. As part of an overall portfolio then you expect to have some exposure to that sort of thing but if its eggs all in one basket or a punt then it is a high risk.

there is almost no way that this fund has another 70% downside from where it is now unless the manager is dead.

maybe not now but many inexperienced investors dont look at 70% loss from now. they look at 70% loss when it happens and manage to forget the years of gain and dont average it out. It could suffer another 30-50% loss from where it is now though.

Risk to an experienced investor with a good understanding will be different to an inexperienced investor with limited understanding.

gadgetmind

dunstonh wrote: »

Risk to an experienced investor with a good understanding will be different to an inexperienced investor with limited understanding.

Agreed 100%.

Yet while I know the OP should switch into a balanced portfolio, I'm still inclined to suggest they stay put until they've worked out what to do rather than selling and sitting on the cash.

olulia

innovate wrote: »

You are still only 2 years into your investment - that's no time at all. If you are convinced it will not recover and only stress you out if you keep it, may be you should sell at a loss now. But I fear you are at risk of making a typical newbie-investor error - i.e. panic sell instead of hanging on in there. You need to have a much longer horizon - at least another 2-4 years from now, preferably even longer.

Of course, I have no crystal ball and the fund may never perform well, or even recover to its launch price.

Thank you - I realise that it is probably a mistake to panic sell - especially since I rode through the worst over the last 18 months! But, I invested this without proper consultation (it was suggested in the Guardian's Money section!) and so I won't be re-investing, but just want to de-stress! I learned my lesson. But... part of me thinks.... things are looking up a little? I think I'll hold on until I reach the original sale price - so I can get out then without too much shame, and lesson learned!

srcandas

I have an interest here as my brother went into this heavily and is still in.

He went for it on the hope that the manager was god like. He had seen how well Mr B had done in another theatre and convinced himself that Mr B had the magic touch.

So his problem is that he has no great faith in China and his faith in Mr B (who has a nice exit plan ) has been sadly exposed. Between a rock and a hard place as they say

Olulia if I were you I'd start to move lumps out and start to build a diversified range of investments (that might be one general fund - doesn't need to be complex). Just don't get hung up on "I made a huge mistake"; you simply did what many did and it might have paid off. And at least you have learnt by it - or you wouldn't be asking in this great forum