Fidelity rebrands its UK Opportunities Fund

Fidelity will rename its UK Opportunities Fund to better reflect its mandate as a UK small cap fund.


The transformation to the Fidelity UK Smaller Companies Fund comes into effect 28 September.

A spokesperson for Fidelity said the change comes in response to feedback from IFAs who felt the fund’s potential could be better communicated to investors. The fund is one of the top performing strategies in its sector. Launched in February, at the end of July it had £15m assets under management.

The fund will not change its investment approach and will maintain the same investment objective, portfolio manager and performance benchmark.

“During this market sell-off it’s been interesting to note that mid caps have generally performed worse than small caps,” said the fund’s manager Alex Wright. “There are two main reasons for this. First, technically the mid cap sector has typically been more heavily owned and is therefore more vulnerable to forced selling. Secondly, the valuations of mid caps are that much more expensive.”

Wright said at the beginning of August the fund had around 8% in cash.

“We have taken advantage of this cash position and the ongoing flows into the fund to opportunistically buy into stage 1 companies which have been heavily sold down, and which also have a more defensive outlook and are less sensitive to the economic cycle,” he said. “Generally these companies are towards the top end of the small cap universe.”

With the economic outlook worsening, Wright had made the fund more cautious on cyclical sectors such as industrials, many of which were already trading at high P/Es on record margins. 

“Having said that, within the small cap universe there remains a wide range of stocks to choose from and this indiscriminate sell-off has resulted in some great opportunities to add to positions which should deliver excellent longer term returns,” he said.



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