Fidelity global special situations manager Jorma Korhonen says the performance of his fund over the past 12 months shows his investment approach is working.
Speaking at the Fidelity investment forum in London last week, he said the first four quarters of his tenure were markedly different in terms of market movements but he outperformed in three of them.
He said he will stick to his approach of seeking out undervalued stocks.
“This is at the core of what I do. I said this 12 months ago and I am saying it again now. If that approach changes, it tells you that something is going very wrong.”
He is cautious on the market’s prospects and warns that current levels of volatility are set to continue because the full impact of the US sub-prime crisis has yet to be felt.
Korhonen said: “We have only seen the beginning of repricing of adjustable rate mortgages and it will continue for the next 12 to 18 months. The only thing I can guarantee is there will be more casualties.” Regarding his stockpicks, Korhonen said trains are a current theme, driven by the migration of manufacturing companies to Asia.
He took on the fund, which was split out of Anthony Bolton’s special situations portfolio, in September 2006. It is ranked 63rd out of 157 in the Investment Management Association’s global growth sector since launch.