Fidelity Special Values PLC (LON:FSV) has published its monthly factsheet for May 2026.
Portfolio Manager Commentary
UK equities posted a second consecutive monthly gain in May, supported by resilient corporate earnings, improving risk appetite and growing optimism that a resolution to the conflict in the Middle East could be reached. While tensions remained elevated, expectations of a ceasefire towards the end of the month contributed to a moderation in oil prices and supported investor sentiment. Elsewhere, the outcome of local elections and signs of softening support for the Labour Party increased speculation around potential political change, raising uncertainty around fiscal policy and public debt. This contributed to market volatility, although concerns later eased following the Party’s reaffirmation of its fiscal rules.
UK equities continue to trade at a significant valuation discount to other major markets, both on an absolute and adjusted basis, reflecting structural differences in index composition such as the higher weighting of technology stocks in the US. Within the UK, particularly compelling opportunities remain among mid and smaller companies, where valuations are still significantly depressed. While this area of the market has been out of favour for some time, ongoing takeover activity and share buybacks are providing support, and it remains well placed to benefit from any improvement in investor sentiment.
On a rolling 12-month basis, the Trust recorded NAV and share price returns of 18.3% and 23.7%, respectively, compared with 21.6% 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.
