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Fidelity Global Special Situations - cautious and company-focused

Jonathon Curtis | Tue 30 April 2019

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 used recent stock market volatility to invest in companies at lower share prices
  • The fund’s fallen behind its benchmark recently but the manager’s got a good long-term track record
  • He thinks banks, car companies and Japanese firms are attractively valued

Our view

Investing globally has become popular in recent years. And it's easy to see why. Global funds are a convenient way to help diversify your portfolio by investing in companies from lots of different countries.

Jeremy Podger's invested globally for more than three decades. He manages the Fidelity Global Special Situations Fund with a flexible approach. Instead of only investing in companies with high-growth expectations or unloved companies, for example, he invests in a wide selection of companies. These can be from both developed and higher-risk emerging markets.

Podger’s one of the most experienced managers in the Global sector. He's a capable manager with a good long-term track record. The fund doesn’t feature on the Wealth 50 list of our favourite funds though. Our analysis suggests there are better stock pickers in the Global sector, who we have more conviction in.

How’s the fund performed?

The fund’s grown 152.6%* since Podger took over in 2012. The benchmark gained 125.0% in that time. Over the past 12 months though the fund’s fallen behind the benchmark. Remember past performance doesn’t indicate future returns.

Returns were held back by disappointing performance from German bank Commerzbank, Austrian sensor manufacturer AMS and Amazon. French multinational retailer Carrefour also disappointed as it suffered from intense competition.

It wasn’t all bad news though. Some of the fund's US investments boosted returns. HCA Healthcare, energy provider Exelon and oil company Andeavor all performed well. The latter company was bought by Marathon Petroleum at the end of 2018. Andeavor shareholders received 24% more than the shares were worth, so Podger made a healthy profit.

Fidelity Global Special Situations performance under Jeremy Podger's tenure

Past performance is not a guide to the future. Source: Lipper IM* to 31/03/2019

Annual percentage growth
Mar 14 -
Mar 15
Mar 15 -
Mar 16
Mar 16 -
Mar 17
Mar 17 -
Mar 18
Mar 18 -
Mar 19
Fidelity Global Special Situations 24.7% 0.7% 36.6% 4.5% 6.3%
FTSE All World 19.2% -0.5% 33.1% 2.9% 10.7%

Past performance is not a guide to the future. Source: Lipper IM to 31/03/2019

Portfolio activity:

Stock markets went through a tough time at the end of 2018. But the manager turned it to his advantage by adding to some of his favourite investments at more attractive share prices. This included American multinational giant GE. The company sold the loss-making parts of its business and brought in a new CEO with a strong track record. Podger expects the company’s healthcare and aviation divisions to drive the share price back up over the long run.

He also invested in Knorr-Bremse, a German braking systems manufacturer, when it listed its shares on the stock market in October 2018. Podger analysed every one of its global competitors before investing so he could be really confident of its prospects.

The fund can also benefit from falling share prices through ‘short’ positions. The manager can use derivatives to do this, which if used adds risk .

Manager’s outlook:

Podger is more cautious than he's been for a long time. He’s concerned about slowing global growth and uncertainty surrounding global politics. He thinks the next few years are going to be tough for investors. But instead of focusing on what’s going on in the economy or political arena, he concentrates on companies he thinks have the best prospects.

He’s keeping a keen eye on banks and car companies in particular. Podger thinks their share prices are lower than the true worth of the companies, so he sees them as good value. He’s also finding lots of opportunities in Japan. He thinks many Japanese companies have healthy finances and attractively priced shares.

Find out more about Fidelity Global Special Situations, including charges

Key investor information

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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