94. Why Brexit planning has helped UK firms deal with lockdown

Alex Wright, manager of Fidelity Special Values investment trust, says the disruptions in supply chains that investors have been worrying about if a hard Brexit comes to pass are not that dissimilar to those we've seen because of COVID. “A lot of UK companies have done reasonably well dealing with the logistics of the pandemic because they had that hard Brexit planning in place already,” he said. Find out more about his views, and the firms he’s investing in, in this podcast.
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Launched in 1994, Fidelity Special Values aims to achieve capital growth by investing primarily in unloved UK companies and waiting for them to come back into favour. Each holding must meet two strict criteria. The first is the preservation of investors’ capital: the managers aim to do this by choosing companies with exceptionally cheap valuations or an asset, such as intellectual property or inventory, which has the potential to limit share price falls. Secondly, they look for companies where there is a catalyst for significant earnings growth.

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What’s covered in this podcast:

  • How the portfolio is currently positioned [0:26]
  • The two stocks hit hard by the pandemic, but which the manager is willing to wait for earnings to recover [2:10]
  • Why the trust’s gearing is currently 14% [3:14]
  • The reason the trust is underweight oil & gas companies and banks [4:37]
  • Why Brexit planning helped UK plc cope with lockdown [6:01]
  • Which overseas companies are held in the portfolio [8:54]
The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.

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