The recent record high from the FTSE 100 seems to be at odds with the uncertain outlook for the UK economy. What’s more, this strong performance from blue-chip stocks has not been reflected across the market cap spectrum, with valuations particularly attractive among smaller companies. Alex Wright, portfolio manager of Fidelity Special Situations Fund and Fidelity Special Values PLC, reviews this complex backdrop and outlines where he sees overlooked investment potential in the current environment.
Key points
- The FTSE 100 recently reached a record high, but there has been a significant discrepancy in performance between large and smaller companies in the UK market.
- We believe that the prospects for value stocks and sectors are particularly strong given that these areas tend to perform well in a higher rate environment.
- We see a range of overlooked opportunities in smaller and medium-sized companies, where valuations still look very attractive.
Fidelity Special Values PLC (LON:FSV) aims to seek out underappreciated companies primarily listed in the UK and is an actively managed contrarian Investment Trust that thrives on volatility and uncertainty.
