Risky – but a bet on China’s tech start-ups can pay off

WHAT DOES IT DO?

Invests in companies in China. Launched in 2010 by veteran investor Anthony Bolton, savers were disappointed by a shaky first couple of years. Its performed well since, and Dale Nicholls took over management in 2014.

WHAT DOES THE MANAGER INVEST IN?

Nicholls prefers what he calls ‘New’ China – consumer driven businesses which tap into the rising middle class and increasing wealth, and those which embrace new technology rather than debtridden, state-owned firms. Favourites include online travel booking site Ctrip and private wealth management firm Noah.

WHAT DO THE EXPERTS THINK?

Darius McDermott, director at ratings agency Fund Calibre, says: ‘Nicholls has done a good job in very volatile times running the trust. His bias to IT and consumer stocks add credence to his view that you need to be in the “new” economy not the “old”, which is something I agree with.’

WHAT DO THE EXPERTS LIKE?

It has ridden the ups and downs of the past couple of years well and with a forward-thinking manager should deliver in the long-term. Fidelity has a lot of resources on the ground in China too, which helps when investing.

AND ARE THERE ANY DOWNSIDES?

The trust can have gearing (effectively borrowing) of up to 30pc of its assets, which can magnify losses or gains. It can also invest in riskier unlisted companies, which have a greater chance of failure than a listed one. There is also a performance fee, which some investors won’t like.