Fidelity Special Values PLC (LON:FSV) has published its monthly factsheet for February 2025.
Portfolio Manager Commentary
UK equities continued to advance in February, despite several geopolitical and trade policy developments. Investors grew more confident in the prospect of a ceasefire in Ukraine, while US President Donald Trump’s proposal to impose tariffs on steel, automobiles, pharmaceuticals, and lumber imports weakened sentiment. The Bank of England delivered a widely expected 25 basis-point rate cut to 4.5%, its third reduction since August, although two committee members had favoured a larger 0.5% cut. At a sector level, defensive sectors such as health care and telecommunications led the way.
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 remains a key feature in the Trust.
On a rolling 12-month basis, the Trust recorded NAV and share price returns of 21.4% and 24.8% respectively, compared to 18.4% 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.
