Fidelity Special Values aims to achieve long-term capital growth predominantly through investment in UK listed companies. The Company will have a blend of investments in larger, medium and smaller-sized companies and be guided by a contrarian philosophy. The Company may invest directly in the shares of companies or indirectly through equity-related instruments (such as derivative contracts, warrants or convertible bonds) and in debt instruments.
Fidelity Special Values invests mainly in companies listed on the London Stock Exchange (although up to 20% can be invested in overseas stock markets). The manager looks for companies where there is limited downside risk. In other words, he wants to invest in companies that have exceptionally cheap valuations or some kind of asset that should stop their share prices falling below a certain level. This can be anything from inventory to intellectual property.
The manager also looks for unrecognised growth potential and events that could significantly improve a company’s earning power, but are not currently reflected in the company’s share price. These include changes in the company’s competitors or market, a new product line or an expansion into new business areas.