Fidelity’s Alex Wright has hiked the £2.8bn Special Situations fund’s exposure to small and mid cap companies in the six months since he took the portfolio on from Sanjeev Shah.
Mr Wright took the fund on from Mr Shah in August last year and has moved to exploit his expertise in the small cap space by increasing the fund’s weight to companies with a market cap exposure of £200m-£500m from 5 per cent to 10 per cent.
He has also increased mid cap companies - those with a market cap of £2bn-£5bn - by 2-3 per cent.
The manager has run the group’s UK Smaller Companies fund since launch in March 2008 since when it has returned 254.6 per cent compared to the 119.8 per cent rise in its Numis Smaller Companies ex Investment Companies index.
Mr Wright said he had added several stocks to the portfolio and sold some which Mr Shah had previously owned.
He said he had divested the fund’s holding in RBS and added Barclays in its place while he had also bought utility stocks SSE and National Grid, among other purchases.
The largest sector change under Mr Wright’s stewardship of the fund has been in financials.
Large new allocations to insurers Resolution and Pheonix and discretionary manager Brewin Dolphin have meant the fund’s overweight to financial companies has roughly doubled.
However, the manager has fully divested holdings Mr Shah had in F&C Asset Management and Jupiter.
The manager has also reduced the holding he inherited in BP by roughly 200 basis points in favour of Royal Dutch Shell.
Mr Wright said he had continued to use the fund’s ability to short the market, whereby the fund benefits if stock prices fall.
He said he had “successful shorts in mining and healthcare” but added these were stock specific rather than representative of negative sentiment against the sectors.
Elsewhere, Mr Wright said support for the fund had been “pretty solid” and said there were not many investors he had not previously met through running his small cap fund and the Special Values investment trust.
Asked if the manager’s expertise towards smaller companies would mean the fund would be constrained in terms of size, Mr Wright said if the fund reached £5bn-£6bn it would be “too big”.