Fidelity Special Values PLC (LON:FSV) has published its monthly factsheet for April 2024.
Portfolio Manager Commentary
UK equities continued their strong performance, reaching record highs in April, fueled by sterling weakness, as the UK’s annual inflation fell to 3.2% in March, meaning inflation is lower in the UK than the US for the first time in three years. Positive economic indicators also supported investor sentiment, with the UK economy expanding for the second consecutive month in February, signaling a likely emergence from the technical recession it fell into at the end of 2023. UK equities bucked the broader market trend, outperforming most global counterparts primarily due to a higher concentration in sectors such as basic materials and energy.
While economic and geopolitical uncertainty is likely to continue, UK valuations compared to historical averages and other markets – and the large divergence in performance between different parts of the market – means there are attractive opportunities in UK stocks on a three-to-five-year view. Their unloved status means that we not only continue to find overlooked companies with good upside potential across industries and the market cap spectrum, but we also do not have to compromise on quality. In aggregate terms, portfolio holdings trade on estimated price/earnings (P/E) ratios for 2024 and 2025 20% cheaper than the FTSE All Share Index, but have lower debt and stronger profit growth outlooks.
On a rolling 12-month basis, the Trust recorded NAV and share price returns of 9.9% and 7.4% respectively, compared to 7.5% for the index.
Fidelity Special Values PLC (LON:FSV) aims to seek out underappreciated companies primarily listed in the UK and is an actively managed contrarian Investment Trust that thrives on volatility and uncertainty.
