Why choose Fidelity Special Values?

Star manager Alex Wright talks us through Fidelity Special Values' performance and discuss the benefits of the fund.

Andy Irvine, chairman, Fidelity Special Values:

Well, Alex's investment style is contrarian. He looks for undervalued companies, he's got the opportunity to look overseas if he wants to; 20% of our portfolio can be based overseas. But he also has the opportunity to look into very large cap stocks, middle-cap, and even some small ones, so he's got a very balanced portfolio. But first and foremost, because of his research capabilities and the research capabilities of Fidelity, he has the opportunity to really spot the undervalued companies that are going to really perform.

Alex Wright, portfolio manager, Fidelity Special Values:

It's not just that we've had good relative performance over the last two years in terms of out-performing the benchmark, but also, these have been strong periods for equity market performance. So, I think few people would have thought that actually, the sort of two years including the Brexit referendum and the election of Donald Trump in the US; big seismic political events that actually the market itself would have made strong, double-digit returns in that year, and cumulative, if you include both, with the fund, yet posting returns in the teens.

Andy Irvine:

Well, there are times in the cycle when the UK can look expensive, but at the moment, the UK is reasonable value, but as I say, he also has the opportunity to go overseas if necessary, and even when the market is strong, there are still those pockets of value that the average investor misses, and Alex has got a great ability to find these undervalued companies.

Alex Wright:

People have been used to, actually, over the last 20 to 30 years, consistently falling long-term interest rates, and consistently out-performing long-term bond yields, and I think we could very much be on a regime change in terms of being at the end of that 30-year bull market in bonds. There is still quite a lot of value out there because of that very bifurcated market, so a lot of very expensive stocks, but still a lot of quite cheap companies.

Alex Denny, Head of Investments, Fidelity International:

Fidelity manages a range of five investment companies, and investment companies are really, really well-suited to a manager like Alex Wright with Fidelity's Special Values, because it's closed-end structure means that he can invest in very small, illiquid stocks, things which are quite difficult to get into and out of in scale, so actually, he's got a whole wide range of options available to him, both actually in terms of listed stocks, but also, he can use derivatives, he can use contracts for difference to achieve gearing, or he can short the market or take hedges out. So he's got really quite a wide range of options available to him.

Andy Irvine:

Well, the AGM is so important because it gives the shareholders the opportunity not only to listen to Alex Wright the investment manager, but also to get an opportunity to quiz him as well. If you just look over there, he's got a huge queue of people desperate to hear from him. And it's also an opportunity for shareholders to meet with the board and ask the board any questions. It only happens once a year, and I'm just so grateful that so many shareholders come along to the Fidelity Special Values shareholder meeting.

Alex Denny:

Investment companies are great long-term saving products. They're fantastic for those who might be saving for their retirement, or those saving for their children, perhaps university fees or for a first home, things like that. And you can own them in a whole wide range of products, so you can own them in a SIPP, a personal pension, you can own them in an ISA, in a Junior ISA, or you can hold them just in a general investment account.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.