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The trust lagged the benchmark in the first-half period but has the right qualities to shine over time
Thursday 05 May 2022 Author: James Crux


Loss to date: 7.5%

Original entry point: Buy at 306.6p, 11 November 2021

We remain positive on Fidelity Special Values (FSV) despite the 7.5% loss since highlighting its attractions last November.

First-half results showed net asset value total return down 4.5% versus a 2.4% rise for the FTSE All-Share index. However, Fidelity Special Values’ net asset value and share price total returns remain ahead of the benchmark over one, three, five and 10 years.

Amid rising price pressures and supply chain constraints, the trust’s industrials and consumer discretionary holdings proved a drag on returns while a long-standing underweight to metals and mining versus the index meant it missed out on strong gains in the commodities sector.

Contrarian manager Alex Wright believes UK shares remain ‘significantly undervalued’ compared to global peers and are reasonably valued in absolute terms.

He argues inflation and interest rate pressures are likely to benefit Fidelity Special Values’ portfolio, which is focused on attractively valued companies with improving fundamentals, given the market focuses on short-term earnings and valuations in these environments.

SHARES SAYS: Stick with Fidelity Special Values despite the short-term performance blip given Wright’s superb long-term track record. 

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