China Special Situations)。富达国际公司隶属于美国共同基金公司富达投资公司(Fidelity
Bolton Bets on China
Anthony Bolton, the Fidelity International veteran portfolio manager,
was so impressed by China’s growth prospects that he exited a
short-lived retirement last November to set up a new fund to invest in
the country, the Fidelity China Special Situations. Fidelity
International is affiliated with U.S. mutual-fund company Fidelity
Investments, itself a unit of FMR LLC, but the two are independent
companies. Mr. Bolton spoke about the risks and rewards of investing
Some market commentators have expressed concern about the inflationary
outlook in China. What’s your view?
Anthony Bolton: I think this concern is overstated. The significant
stimulus applied to the Chinese economy during the financial crisis
appears to have achieved the desired outcome. The government is,
therefore, moving to slow credit expansion and I believe it is right
to do so. However, in my view the Chinese authorities have a record of
moving slowly and in a measured way and I would expect them to
continue to do so.
I would be surprised if the government made the kinds of big,
aggressive moves that unsettle investors but it is obviously something
that I will be watching closely. The size of the infrastructure
stimulus and credit expansion was such that I think we are, to an
extent, in uncharted territory.
So is talk of an asset bubble forming in China unfounded?
Mr. Bolton: It is far too early to be talking in those terms. Clearly,
shares are no longer as cheap as they were at the end of 2008 and the
beginning of last year, but I do not think valuations are excessive.
Also, in my experience, bubbles take several years to develop and not
just one. The bear market in Chinese equities was sufficiently savage
that the clock effectively restarted in November 2008. I believe we
are just a year into a bull market that could last for several years,
albeit with the kinds of setbacks along the way that you would expect
from an emerging market.
China is obviously a riskier market. Key uncertainties include the
relationship between China and the US, the threat of internal unrest
and the ever-present danger of unexpected, capricious political
decisions. This is, after all, a one-party state. At the stock level,
the quality of management and information about companies is variable,
although this is a source of opportunity, as much as risk.
Are you happy with the risks, and what is the real opportunity in China?
Mr. Bolton: My enthusiasm for the Chinese opportunity is long-term and
I am looking through these short-term concerns. There are three
principal reasons for my excitement about China. First, I believe that
compared to what could be relatively pedestrian growth in Europe and
the US in the post-financial crisis world, China’s growth prospects
will look relatively compelling. This could lead to a significant
transfer of investments from developed markets to China. I also
believe there will be an increase in the value of the renminbi.
Second, I expect the gap between China’s economic significance and the
relative weight of its stock markets in global terms to narrow
considerably over the next 20 years or so. China is likely to overtake
Japan to become the world’s second largest economy but its stock
market remains a relative also-ran. As a consequence of new issues and
share price appreciation, I would be surprised if it were not the
world’s second largest within my lifetime.
The most exciting argument in favor of investing in China today,
however, is its position on the so-called S-curve. China is at the
investment ‘sweet spot’ for developing markets which occurs when
incomes per head of population rise steadily but consumption increases
rapidly, the retail sector develops and the service sector begins to
take off. The same thing happened 20 or 30 years ago in Taiwan and
Korea and before that in Japan. What is interesting this time around
is the sheer scale of the transition. This kind of development has
never before happened in a country of 1.3 billion people.
Will your stock-picking approach work in China?
Mr. Bolton: Some people have questioned the relevance of a
stock-picking approach in China. I am surprised by this. In many ways
China today reminds me of the investment opportunity in Europe in the
early days of my career. Back then a research-led, long-term approach
was considered unusual in what was considered to be a traders’ market.
It proved to be successful, however, and I am confident that the
European experience will be invaluable if, as I believe, the Chinese
market develops away from its current manufacturing and financials
bias towards a broader service sector-led investment opportunity.
Given volatility in equities over the past few weeks, how resilient is
the stock market recovery to these jitters?
Mr. Bolton: This time last year, I was in the unusual position of
having a strong view on the market. I felt that the combination of
poor sentiment, valuations and the length of the downturn argued for a
reversal of the bear market. In my experience, these moments are
relatively rare so I am not surprised that I do not have such a strong
view today. I believe that the bull market has further to go but we
have not yet had a material consolidation and I would expect there to
be one over the next few months.
Importantly, I believe the leadership of the market will change from
more cyclical industrial and materials companies and lower quality
shares to more growth-oriented areas and higher-quality shares. While
there has been a significant improvement in the global economy, with a
lot of positive data coming through, I believe that the world we are
heading towards will be very different from the world before the
financial crisis, with slower growth especially in America and Europe.
In such an environment, I would expect investors to be prepared to pay
up for high growth or low but predictable growth. I would, for
example, expect technology to continue to do well. I am expecting
another leg up for financials this year but I think the outlook is
better for commercial rather than investment banks. The authorities
need commercial banks to recover and lend but they have little
interest in the success of investment banks.