Bolton trust may not be suitable for retail investors - Winterflood

The gearing and mid/small cap bias of Anthony Bolton's Fidelity China Special Situations trust have raised questions over its suitability for retail investors, Winterflood Securities has said.

Following a meeting with Bolton last week, analysts at the broker said they had "increasing concerns" with the struggling fund that do not solely centre on performance. Winterflood said the level of gearing - around 20% - adds substantial risk to the fund, and said Bolton's use of hedging strategies "dilutes the fund's investment message". "Although we would expect the fund to perform strongly in a bull market, due to its gearing and mid/small cap bias, we would question its suitability of this fund for the retail investors that make up the bulk of its shareholder base," said analysts...