UK investment trust, Fidelity Special Values PLC (LON:FSV) monthly factsheet for the period ended 31 March 2023
Portfolio Manager Commentary
UK equities declined in March on concerns over potential fallouts following the sudden collapse of US-based Silicon Valley Bank and Signature Bank, and the subsequent turmoil at Credit Suisse. In the UK, inflation has remained stubbornly high and unexpectedly rose to 10.4% in February, which prompted the Bank of England to raise its key interest rate by 0.25%, following in the footsteps of the US Federal Reserve. Energy stocks fared the worst as growing fears of a recession kept crude oil prices under pressure. Financials suffered heavy losses as concerns about the stability of the banking system persisted, conversely, utilities and health care outperformed.
The relative attractiveness of UK valuations versus other markets, and the large divergence in performance between different parts of the market, continue to create good opportunities for attractive
returns from UK stocks on a three-to-five-year view. The smaller end of the market cap spectrum is particularly rich in investment opportunities given the lack of research coverage. The attractive
valuations in the UK have not gone unnoticed and after several months of limited activity, there has been a recent uptick in M&A activity with approaches for three of our holdings so far this year – John Wood Group, Fulham Shore and Unbound Group.
On a rolling 12-month basis, the Trust recorded NAV and share price returns of 5.0% and -3.7% respectively, compared to 2.9% 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.
