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Fidelity’s Shah trust has “difficult and disappointing year”

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The chairman of Fidelity special values has described a “difficult and disappointing year” for the investment trust managed by Sanjeev Shah (pictured).

Lynn Ruddick, chairman of the investment trust, says the closed-end fund has recorded a net asset value total loss of 4.1 per cent, compared with a total return of 7.3 per cent for the FTSE All-Share index.

She says: “Two significant contributors to Fidelity special values’ underperformance in this period were that the portfolio was substantially underweight mining and commodity-related stocks, while retaining an overweight to UK retail banks, and in particular Lloyds and RBS.”

Ruddick adds: “We have always made clear that we will judge success over the long term and that Sanjeev should not feel obligated to try to participate in shorter-term trends which may be driven by fear or unrealistic optimism rather than by fundamental value.”

She says the investment trust’s board still believes in the contrarian strategy pursued by Shah, and that it will produce “better returns” in the longer term


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Readers' comments (3)

  • ..this is why Tracker funds are a more secure bet for many investors - no public excuses for underperformance. Surely fund managers are paid to outperform the market conditions right?

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  • In my opinion (and I hold several actively managed funds plus one tracker) managers are paid to outperform over a cycle, rather than in ANY market conditions. If they (like Fidelity Special Values has) achieve the former I'm happy to have paid them. My tracker, on the other hand, won't underperform but it's guaranteed never to outperform, so I expect to pay much less. They're different beasts.

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  • I sold out of this fund (and its sistemn Global fund) quite recently - it has never performed well since Sanjeev Shah took over, whereas previously (under Anthony Bolton) it was a star for many years for me. I am quite contarian for part of my investments, but not being fooled by the braying herd is one thing and being overweight in Lloyds and RBS in a long term banking crisis is another..

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