UK investment trust FSV beats index as NAV rises 10.6% over 12 months

Fidelity

UK investment trust, Fidelity Special Values PLC (LON:FSV) monthly factsheet for the period ended 28 February 2023 

Portfolio Manager Commentary 

UK equities started the month on a strong footing before giving back some of their gains in the latter half of the month. Investors became increasingly concerned rates may have further to rise after a string of economic reports and company results showed that many Western economies were performing better than expected. The Bank of England was relatively dovish in its commentary as it announced a 0.50% rate hike early in the month. In this environment, weaker areas of the market such as leisure remained under pressure. Conversely, the ongoing conflict in Ukraine supported the performance of energy and defence companies. 

Whilst inflation pressures may have started to decelerate, the environment is likely to remain uncertain over the coming year. However, the relative attractiveness of UK valuations compared to other markets and the large divergence in performance between different parts of the market continue to create good opportunities. The value on offer was underlined again this month by news that one of our holdings, John Wood Group, had received a number of unsolicited bids from New York-based private equity group Apollo. While rising rates have dulled the ability of private equity groups to borrow, we may continue to see bids from US and North American corporates. 

On a rolling 12-month basis, the Trust recorded NAV and share price returns of 10.6% and 2.7% respectively, compared to 7.3% 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.

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