Fidelity Special Values PLC (LON:FSV) has published its monthly factsheet for December 2024.
Portfolio Manager Commentary
UK equities ended December in negative territory despite registering strong gains for the whole of 2024. Initially, markets responded positively to the US election results, but moderated their optimism after the Federal Reserve signalled fewer rate cuts than expected for 2025. Meanwhile, in the UK, the Bank of England held its key interest rate at 4.75% in December, with three Monetary Policy Committee members voting for a cut amid signs of weakening demand and a softening labour market.
Despite their improved performance over recent years, UK equities still look cheap relative to other markets, and reasonable on an absolute basis. We believe that the combination of attractive valuations and the large divergence in performance between different parts of the market create good opportunities for attractive returns from UK stocks on a three-to-five-year view. Although the UK market continues to remain largely unloved by domestic investors, its attractive valuations are being recognised by other market participants, such as overseas corporates and private equity firms, who have been amongst the biggest bidders in the UK market. Underlining this interest has been the sharp spike in M&A activity, which typically benefits the Trust given our focus on attractive valuations.
On a rolling 12-month basis, the Trust recorded NAV and share price returns of 15.1% and 15.7% respectively, compared to 9.5% 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.
