Fidelity Special Values Underperforms Benchmark In First Half

(Alliance News) - Fidelity Special Values PLC on Tuesday reported a drop in net assets over the first half, underperforming its benchmark.

At February 29, the trust's NAV per share stood at 233.00 pence, down 7.9% from 252.99p six months earlier.

Over the first half, Fidelity Special Values saw its net assets slip 4.1% to GBP670.2 million from GBP698.7 million.

The trust proposed an interim dividend of 2.1p, unchanged on the year before.

Fidelity Special Values recorded a NAV total return of negative 6.1% in the six-month period, underperforming the FTSE All-Share which lost 5.5% over the same period.

The trust's Portfolio Manager Alex Wright said: "Most of this decline in performance occurred in the year to date period in 2020 as growing concerns over the potential impact of Covid-19 weighed on equity prices globally and the company's holdings were caught in the widespread sell-off.

"Positioning within the consumer services and utilities sectors were undermined by the company's lack of exposure to large defensive names such as British American Tobacco PLC and National Grid PLC, while some of the holdings were held back by near term company-specific setbacks."

Wright added the the trust's overweight stance in financials and strong stock selection in the health care sectors were able to make "significant" contributions during the period despite the "difficult environment".

Looking ahead, Wright believes the recent sell-off is a "potential opportunity".

"This is not to downplay the near term challenges the economy, companies, markets and society itself will face in coming months. Indeed, it is now very clear that the impact on UK and global economic activity will be greater than we saw in the financial crisis between 2007 and 2009," he added.

Wright said the trust closed positions in companies most affected by the outbreak and the oil price slump, and where the outlook has worsened beyond the short term.

Shares in Fidelity Special Values were 2.6% higher in London on Tuesday at 183.40 pence each.

By Paul McGowan; paulmcgowan@alliancenews.com

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