Cash in on China’s long-term growth with three competitive stocks

Dale Nicholls, portfolio manager of the Fidelity China Special Situations Trust, highlights three Chinese companies with scalable growth potential

Lujiazui cityscape with modern skyscrapers, Pudong, Shanghai, China
(Image credit: Getty Images)

The trust aims to provide investors with access to a wide range of opportunities in China, leveraging the unique advantages of its structure, such as the ability to use gearing, invest in private companies, and employ derivatives. I look for firms with scalable growth potential, strong returns on capital based on a clear competitive advantage and strong management.

These often align with secular growth trends, but I pay close attention to cyclicality, as it can also present opportunities. I prioritise management teams with a proven record of strong execution and favour under-researched small- and mid-cap stocks capable of outperforming the market.

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Dale Nicholls

Dale Nicholls is manager of the Fidelity China Special Situations Trust.