In this engaging discussion, Alex Wright, manager of the Fidelity Special Values Investment Trust, shares insights into the UK equity market's paradoxical strength despite local investor outflows. He highlights the appeal of mid and small-cap investments and the impact of evolving legislation on job markets. Wright also tackles the resurgence in commercial property, particularly in retail and oil, and emphasizes the importance of active management in volatile environments, arguing for the benefits of intelligent stock selection over passive strategies.
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insights INSIGHT
UK Market Attractiveness
The UK equity market remains attractive, trading at around 13 times earnings, below its long-term average.
Compared to the US and other developed markets, UK equities offer better relative value, especially in mid and small caps.
insights INSIGHT
Foreign Buying Propels UK Market
UK investors have been selling UK equities while US and global investors have been buying them.
US investors find the UK market attractive due to valuation gaps and ease of investment.
insights INSIGHT
Stable UK Market Performance
The UK market delivers consistent returns with about 7.5% per annum over 30 years.
Stamp duty and pension participation could be improved, but overall the market’s fundamentals are strong.
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In this edition of the Money Makers Investment Trusts Podcast, Jonathan Davis, editor of the Investment Trusts Handbook and winner of the 2024 AIC Best Broadcast Journalist Award, is joined by Alex Wright, manager of the Fidelity Special Values Investment Trust, and Fidelity Special Situations, the open-ended equivalent fund.
This discussion was recorded on Tuesday 01 July 2025.
*** Out now: The 2025 Investment Trusts Handbook ***
The Investment Trusts Handbook is an independent educational publication designed to provide investors with a handy annual reference book that summarises all you need to know about investment trusts. Now in its eighth year, the Handbook is a high-quality, full-colour hardback of more than 340 pages, the largest yet, with reviews of the past year, extensive interviews and commentary, plus nearly 80 pages of “how to” information and performance data. Available to order from Harriman House (https://harriman-house.com/ithb2025) or Amazon. There is also a free e-book version you can read on a PC, tablet or smartphone, plus an audiobook version.
***
Section Timestamps:
0:00:24 - Introduction
0:01:03 - The UK equity market
0:06:54 - Structural issues in the UK market
0:10:16 - The stock selection
0:11:50 - Getting the measure of Trump
0:15:35 - Domestic policy impact
0:17:38 - A short break
0:18:45 - The portfolio
0:29:38 - The small, mid, and large cap balance
0:33:42 - Discount and gearing
0:37:10 - Learnings from the last twelve years
0:39:38 - Active and passive management
0:43:01 - Close
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