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01 Feb 2021

Fidelity Special Values

Company Notes

Manager's optimism reflected in gearing

Fidelity Special Values* has been managed by Alex Wright since 2012, while Jonathan Winton was appointed co-manager in February 2020. The fund aims to achieve long-term capital growth by investing in unloved companies with the potential for change. The managers have a contrarian, value approach and focus on the margin of safety in investment. The portfolio has a bias to mid and small cap stocks and is the most value-oriented investment trust in the UK All Companies peer group.



Since Alex Wright was appointed manager of the fund on 1 September 2012, it has delivered a NAV total return of +127%, outperforming both the +65% return of its benchmark, the FTSE All Share Index, and the +104% return of the UK All Companies peer group. This outperformance has been achieved despite value investing having lagged the market over this time period, with the MSCI UK Value Index (+27%) delivering less than half the return of the FTSE All Share (+65%).



The manager is extremely bullish on the outlook for the fund’s investment universe as he finds that UK stocks, and value stocks in particular, are very cheap at present. While this has been the case for a number of years, he thinks that the recent developments of a Brexit deal being reached and the Covid-19 vaccine being rolled out could be key catalysts for a re-rating as investor confidence returns. This optimism is reflected in the fund’s gearing, which, at around 16% at present, is at one of the highest levels under Alex Wright’s tenure.



*Denotes a corporate broking client of Winterflood Securities