Fidelity Closed end fund review – March 2018 – is a regular publication looking at Fidelity and recent developments in three of its investment trusts – Fidelity Asian Values, Fidelity Japanese Values and Fidelity Special Values.

In this issue:

Fidelity Asian Values (FAS) posted decent positive returns during 2017 but has continued to lag its peer group and benchmark, which have benefited from their exposures to large caps and technology (two areas which FAS does not typically focus on). The manager, Nitin Bajaj, is not unduly concerned by this development. He expects that, over the long term, he will be able to provide strong positive returns that are not dependent on being exposed to fashionable market segments.

Fidelity Japanese Values provided strong positive returns during 2017. It benefited from both a rising Japanese equity market and a shift in investors’ focus back towards growth stocks, although stock selection was the major driver of performance. Corporate profits and margins are at record highs, but the trust’s manager, Nicholas Price, sees room for further improvement driven by a stronger local economy and a favourable global outlook.

With the UK market having had a strong run during 2017, Fidelity Special Values’ manager, Alex Wright, who himself sounded a note of caution in QuotedData’s July 2017 review, is increasingly being asked whether there is real value left in the market. Alex answers a resounding ‘yes’, but acknowledges that value investors need to be selective. He believes that there are many stocks that are deeply out of favour and this generates opportunities. By way of example, FSV’s portfolio has 14 stocks trading below book value. Page 17 has some detail on these.

FJV/ FAS / FSV : Fidelity Closed end fund review – March 2018