Fidelity Special Values’ investment objective is to achieve long-term capital growth, primarily through investment in the equities (and their related financial instruments) of UK companies that the manager believes to be undervalued or where potential has not been recognised by the market. Investments are only made in companies where the potential downside risk is understood, to limit the possibility of losses. The trust’s performance is measured against a broad index of UK companies.
Fidelity Special Values (FSV) offers a value-based, contrarian investment approach aimed at achieving long-term capital growth through investment in overlooked and undervalued UK equities. Value investing has been out of favour for some years and the underperformance of UK value stocks worsened during last year’s market sell-off. However, this created many opportunities which FSV’s managers Alex Wright and Jonathan Winton sought to exploit and, with value stocks now returning to favour, their efforts are beginning to pay off. After a period of disappointing performance, particularly in Q120, FSV’s returns have recently improved. The trust returned 24.7% in NAV terms in the three months to end January 2021, outperforming the UK market, which returned 16.5%. Despite the recent improvement in UK value stocks, they still offer value and there is scope for further upside if the improving economic outlook supports continued rotation into value stocks. FSV’s managers believe the trust is well-positioned to take full advantage of this trend.