Fidelity Special Values (FSV) owns a portfolio of predominantly UK equities that manager Alex Wright, alongside co-manager Jonathan Winton, selects with a contrarian mindset. Alex takes a bottom-up approach, looking for companies from across the market-cap spectrum that are overlooked and therefore undervalued by the market. This leads to a Portfolio of around 80 to 120 holdings which has a bias toward smaller companies and a value style-tilt.

Alex has delivered significant outperformance of the benchmark over a number of time periods, with stock selection a significant contributor. Near-term Performance has been aided by the value style tailwinds, though the trust remains ahead over five years, which includes a period where there was a significant style headwind. Despite the recent outperformance, the trust’s shares are currently trading at a wide Discount to NAV.

FSV pays a Dividend twice a year, as well as occasional special dividends. Whilst not a core focus for the manager, the ordinary dividend has been increased every year since 2009 and offers a historic yield of 3.1%.

Alex has reduced the level of Gearing in the trust over the past 18 months. This reflects a more cautious stance given the strong recent performance of risk assets and the higher cost of borrowing. The current effective level of net gearing is c. 3% which allows Alex to gain exposure to a number of stocks he believes are trading at cheap valuations whilst balancing the exposure to a potential slowdown in economic conditions.