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Should you back Bolton in the China shop?

Anthony Bolton

I thought modern retirement was meant to be an exciting affair – cruises around the Maldives, skiing holidays in Peru, and kinky parties where the plucky OAPs put their bus passes into a bowl and take a lucky dip.

Although I may have misread the brochure.

In any event, it’s not exciting enough for Anthony Bolton, the superstar Fidelity fund manager, who will see ‘Britain’s Warren Buffett’ chiseled on his grave.

Bolton has stuck out two years in retirement before getting bored and deciding to invest in China. (Buffett could have told him to stick to the day job).

Bolton says he’s launching his new Special Situations China trust because:

“History shows that many developing economies go through acceleration in their growth once GDP per head reaches a critical level, a phenomenon called the ‘S curve effect’.

The most interesting aspect of China’s development is its position on this curve – it is in the investment sweet spot.”

It’s all too tempting for an old cowboy like Bolton, who can’t resist riding back out to the range.

Perhaps it’s a little sad that a 60-year old man who’s surely rich beyond most of our wildest dreams can’t find peace driving golf carts around his mansion and counting his millions in the attic.

On the other hand, Bolton clearly loves investing, which was no doubt one reason he was so successful. If you love something, do something about it.

Good for him, I say, and good for his wife who encouraged Bolton to go for it:

I said to my wife that the exciting opportunities available in China – and my belief that the market could go a lot higher over the next few years – made me wish I was still managing money.

Rather to my surprise, she said that as I only had one life I should consider running a fund again while I still had the opportunity.

What a gal! I’m sure having a restless alpha male like Bolton cluttering up her sitting room after 28 years of peace and quiet has nothing to do with her unconditional support.

(Only kidding Mrs Bolton!)

Bolton in China: Invest or avoid?

So what about us, the punters? Should we also support Bolton and stump up the £630 million he needs to fund his late middle-age crisis?

There’s no doubt Bolton will  get the money he needs for the China Special Situations Trust – his track record alone will see to that. A few of his former retail backers might even feel they owe him one! This will be the most over-subscribed investment trust in decades.

However success is not guaranteed.

I’m ignoring for a moment the fact that index trackers beat nearly all active fund managers; let’s assume that Bolton has sufficiently proved that he’s got the magic dust required.

I’m thinking of other specific issues relating to this new investment trust.

We don’t know the details yet, but given Bolton’s history we can be pretty sure it will be based around:

  • Big contrarian bets
  • Generally value as opposed to growth stocks
  • Flexible investment criteria and methods
  • Shoe leather: Bolton likes to meet the managers
  • A bit of chartist / technical analysis / voodoo

The trouble is half the funds operating out of London would claim those methods, and their returns are regularly beaten by trackers, after charges.

Can Bolton do better? Obviously, I don’t know – I can think of pros and cons.

But because Bolton is such a big beast in UK investing, and because I thought it’d be fun to do something different (and because I want to write shorter articles, and didn’t), I’m declaring it’s Anthony Bolton day on Monevator!

Over the course of today you’ll see three more articles appear on the site:

I  hope my US readers will tolerate this UK-share centric extravaganza for 24 hours, and that some UK readers chime in with their own thoughts.

I’ll add links above as the articles go live, so come back in a couple of hours for six good reasons to invest in Anthony Bolton’s China fund. (Or subscribe to get notified when each post goes live).

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{ 5 comments… add one }
  • 1 Ryan @ Planting Dollars February 11, 2010, 1:08 pm

    I’m glad you mentioned Bolton because before this post I’d never heard of him… sounds like my kinda guy… follow your passion until you reach the grave! Is he the richest man in England?? (hope that’s not a dumb question) Off to Wikipedia to learn more I go!
    .-= Ryan @ Planting Dollars on: Hiking Diamond Head and Snorkeling In Waikiki =-.

  • 2 The Investor February 11, 2010, 1:21 pm

    Hi Ryan – no, Bolton isn’t so rich – perhaps I overdid the ‘wildest dreams’ bit. (Most of the richest people in Britain are from overseas, since we downgraded the Queen by marking her assets as owned by the nation rather than her family).

    Bolton is more like another Fidelity fund manager – your Peter Lynch in the US. His record is much longer though (he invested about a decade longer than Lynch, from memory).

    Buffett is so rich because he’s more like a hedge fund founder and entrepreneur – he had lots of his own skin in the game at the start, rather than running other people’s money like Bolton and Lynch.

  • 3 OldPro February 12, 2010, 12:21 am

    Bolton has to be given the benefit of the doubt because he made some of us a lot of money in the 1990s. S’pose I fit into the ‘I owe the old boy one’ bulge bracket. (Bigger bulge around the waist than the wallet he says modestly…)

  • 4 Jimmy Pickup March 14, 2010, 4:41 pm

    What happens if the fund is over subscribed? Partial allocation?

  • 5 The Investor March 14, 2010, 11:30 pm

    @Jimmy – Yes, Fidelity will scale back the issue. Apparently the £400 million set aside for direct investment by private investors is ringfenced though (so institutions can’t back it all).

    Note: As per the final post in this sequence, I’m not going to invest in this fund personally – don’t like the fees!

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