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Fidelity - looking for the world's special companies

Kate Marshall | Mon 26 March 2018

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.
  • Jeremy Podger has a long track record investing in global stock markets
  • He invests in variety of a companies, so the fund could perform well in different market conditions
  • We currently have greater conviction in other global fund managers, but will continue to monitor performance

Our View

Jeremy Podger has a long track record and extensive experience investing in companies from across the globe, including higher-risk emerging markets. We believe he uses a sensible investment approach in running the Fidelity Global Special Situations Fund. He also has support of Fidelity's team of global investment analysts, who help generate investment ideas for the portfolio.

In our view, the manger has the potential to deliver good long-term returns for investors. The fund does not currently feature on the Wealth 150+ though. We currently have higher conviction in other managers in the Global sector, who we feel have delivered greater returns over a prolonged period through good stock picking – the ability to invest in companies that go on to perform well, regardless of which sector or country they are located.

Portfolio review

Jeremy Podger splits the fund into three categories. In his view, investing in different types of company means the fund has a better chance of performing well in a variety of market conditions.

Corporate change - These companies are undergoing significant change, hopefully for the better. They might be reorganised or merged with another company, or sell part of the business that no longer fits their longer-term strategy.

Royal Dutch Shell is a current example. The oil company previously acquired BG Group, which enhanced its existing activities and services. The acquisition helped the company become one of the largest foreign oil companies in Brazil, which is highly prized for its oil reserves, and a global leader in liquefied natural gas, which is increasingly popular as a cleaner fuel. There is now also greater focus on keeping costs under control.

Unique businesses - These companies should be dominant within their chosen industry. They should have strong, long-term performance potential, generate high levels of cash, and have the ability to increase the prices of their goods or services without affecting consumer demand.

Walt Disney is a current investment and, as the owner of one the world's most well-known brands, it has the ability to create or acquire exciting new content. The company owns a number of dominant TV franchises, in areas such as US sports, and children's film and TV. Its growth is supported by the rise of pay TV and new theme parks.

Exceptional value - The shares of these companies can be purchased at an attractive price in comparison with their long-term growth potential. They're often undergoing some sort of improvement, such as in earnings growth, and tend to be more sensitive to the health of the wider economy.

Citigroup sits in this category. The US bank already has a significant presence in the emerging markets and could benefit further as incomes rise and people use more financial products and services. Jeremy Podger expects to see an improvement in the company's earnings and financial health.

More broadly, the manager has increased the fund's exposure to Japan, which currently accounts for 12% of the portfolio. The country is seeing a lot of corporate reform and companies are increasingly focused on acting in the interest of shareholders. The manager also believes the Japanese stock market offers greater value than many other regions.

Performance

Jeremy Podger took over management of the fund in March 2012 – over this time it's grown 147.1% compared with 113.5%* for the FTSE World Index. The global fund he previously managed from 2003 to 2011 outperformed the broad global stock market, but to a lesser degree. Please remember past performance is not a guide to future returns.

We are impressed with the manager's performance since joining Fidelity, but currently believe there are other managers with superior long-term track records.

Annual percentage growth
Feb 2013 -
Feb 2014
Feb 2014 -
Feb 2015
Feb 2015 -
Feb 2016
Feb 2016 -
Feb 2017
Feb 2017 -
Feb 2018
Fidelity Global Special Situations 14.2% 19.3% 2.2% 38.0% 10.2%
FTSE World 8.6% 17.1% -1.5% 37.4% 7.3%

Past performance is not a guide to the future. Source: Lipper IM* to 28/02/2018.

Please note the manager has the ability to use derivatives, which can increase risk.

Please read the Key Features/ Key Investor Information in addition to the information above.

Find out more about this fund including how to invest

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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