Fidelity UK Smaller Companies W

UK small cap equity fund favouring stocks with recovery potential.

  • 332.40p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.92%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 1.50%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 09 April 2021, fund data last updated 30 April 2015

The Fund targets long term capital growth by investing primarily in smaller UK equities, though some mid cap and overseas companies may also be included. Unusually for a smaller companies fund the manager takes a contrarian approach, looking for companies which have underperformed but have recovery potential and where further downside is limited. Following an increase in assets under management Fidelity have closed the fund to new lump sum investments with effect from 6 April 2016.

Fund summary

Sector UK Smaller Companies
Structure OEIC
Launched October, 2012
Size £324m
Yield 1.50%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.92%

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Investment process

From the core universe of around 1,000 stocks in the £25m to £1.5bn market cap range, ideas are generated through a filtering process which combines quantitative screens, research analyst input and sell side research. Managers Alex Wright and Jonathan Winton look for companies that have limited downside risks and unrecognised growth potential. They seek to buy companies that have tangible assets, such as cash or property, or defensive and sustainable earnings streams. These features should give the companies shares limited quantifiable downside. Additionally, all the investments must be entering a period of positive change which is not yet recognised by the market. This could involve the launch of a new product, entry into a new geography, or an improving competitive environment. By focussing attention further down the market capitalisation scale, the managers are better able to identify positive change that the market has missed. The fund has the freedom to invest outside its principal geographies, market sectors, industries or asset classes, and may hold up to 20% in mid-cap and larger companies. The fund may hold up to 5% of NAV in short positions with net exposure always being close to 100%.

Alex Wright who has been running the fund since 2011 stepped back from managing the strategy in 2019. It is now managed solely by Jonathan Winton, who has been a co-PM alongside Wright since February 2013 having previously worked closely with Wright on the mandate. The fund's investment approach remains unchanged and is best described as flexible, typically providing protection in down markets as well as offering upside in rising markets.

Manager research

Average monthly relative returns

  • 16/17 0.16%
  • 17/18 0.49%
  • 18/19 -0.09%
  • 19/20 0.21%
  • 20/21 0.76%

Bestinvest MRI

  • 3 years 0.29%
  • 5 years 0.31%
  • Career 0.35%
  • 3 years 90.70%
  • 5 years 97.80%
  • Career 99.90%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Alex Wright / Jonathan Winton

Wright graduated from Warwick University in 2001 with a First Class Honours degree in Economics. He joined Fidelity the same year and worked as analyst in various sectors, including UK small cap, until 2008 when he became a portfolio manager. He also runs Fidelity Special Situations Fund and Fidelity Special Values Investment Trust. Wright is a CFA charterholder.

Track record

Alex Wright / Jonathan Winton has 8.1 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.35%. During the worst period of relative performance (from October 2019 - September 2020) there was a decline of 4% relative to the index. The worst absolute loss has been 37%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance

Absolute -37.00% (December 2019 - March 2020)
Relative -4.00% (October 2019 - September 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

4.2% Serco Group Plc
3.3% Ultra Electronics Hldgs
3% Contourglobal Plc
2.8% Chemring Group
2.7% John Laing Group Plc
2.6% Brooks Macdonald Group
2.2% Pearson
2.2% Cls Hldgs Plc
2.2% Gear 4 Music (Hldgs) Ltd
2.1% Xaar
Source: Trustnet

Sector breakdown

Industrials 28.00%
Consumer Discretionary 19.00%
Financials 12.00%
Communications 7.00%
Materials 6.00%
Real Estate 6.00%
Others 5.00%
Information Technology 4.00%
Health Care 4.00%
Consumer Staples 4.00%

Portfolio

80-100 stocks. Primarily invests in the bottom 10% of the UK market by size, including AiM. Position sizes are principally determined by the amount of downside protection offered. The largest individual holding is on average 4%.

Constraints

Up to 20% may be invested in mid cap and larger companies or outside the UK. Annual turnover 60%-80%.

Key Investor Information

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