10 Mar 2010 | James Budden

BIG in China 

Anthony Bolton’s  launch of his China Special Situations Trust has got tongues wagging and drums beating. It is great to see a nice big launch of an investment trust at last and one must applaud his support for this structure in the face of caution from intermediaries.

Fidelity is looking to bag £650m initially and it looks promising so far with the Bolton factor providing a big head start. But is he, as Cheryl Cole would say, worth it? He is putting his money where his mouth is and investing £2.5m of his own cash and heading to Hong Kong with Sarah (his wife) for at least three years at the modern middle age of 60.

So you might well think he is worth it. But three years is not that long a time in investment trust circles and investors are being asked to pay quite a lot for the privilege of Mr Bolton’s steady hand on the tiller while the ship leaves port. The Trust, which pays out even in a falling market, will have a 1.5% annual charge excluding expenses and a performance fee  which could in effect double the charges.

An alternative could be to invest in China through Pacific Horizon or, using Scottish Mortgage to tap into investment themes closely linked to the China story. And if you were to do so you would be paying a Total Expense Ratio (TER) of 1.35%* for Mike Gush and 0.55%** for James Anderson.

*As at 31 January 2010, source Baillie Gifford.
**As at 30 September 2009, source Baillie Gifford. 

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