By Kira Nickerson The Fidelity Recovery fund is to be renamed Fidelity Aggressive and will invest in...
By Kira Nickerson
The Fidelity Recovery fund is to be renamed Fidelity Aggressive and will invest in a wider universe of UK stocks with fewer restrictions.
Glen Pratt took over as fund manager of Fidelity Recovery from Graham Clapp last year and since then has steadily widened the fund's investment remit.
Rather than investing in the bottom 20% of the UK market , the investible universe has been expanded to include large and mid caps as well as the option to buy into overseas companies.
Pratt said: "I used to look at companies that were out of favour in the market but I believed the prospects for them would improve. Typically these stocks were in the mid- to small-cap range.
"There are now no restrictions on the fund and it does not look at any particular theme or sector. It is a pure stock-picking portfolio. At the moment there is a slight bias towards value and while some believe 'aggressive' is synonymous with growth, I am anxious to avoid being typecast as either value or growth."
Pratt works with a team of 50 analysts, who rate the stocks in the All-Share. Those that are rated a one or two, out of five, form an initial pool from which Pratt picks, following further analysis, including company visits. The benchmark for the fund is the FTSE All-Share, and Pratt is aiming to run a tracking error of 8-9%.
There are now 110 stocks in the portfolio, which used to hold an average of 90, and Pratt said this is likely to be maintained in order to provide diversification. The fund has a 30% weighting in the FTSE 100, compared with an approximate 80% weighting of the index; close to 20% is invested in the mid-cap 250, compared with the index weighting of 16%.
Pratt is heavily overweight small caps at the moment with 28% in this area compared with the less than 5% weighting of its benchmark. The remainder of the fund is allocated to stocks outside the All-Share and include some foreign stocks and cash.
Pratt said: "We used to hold a lot of cyclicals such as house builders, service companies and textiles and you would not have seen any weightings in banks, pharmaceuticals, oil or telecoms as these were not considered recovery stocks."
The two largest holdings in the fund now includes Vodafone and BP Amoco.
The Recovery fund is currently featuring a 1.25% discount off its initial charge until 1 September 2000.
Over the year to 5 July the fund is ranked 11 out of 283 funds in the UK All Companies sector, posting returns of 33.4%.
Fidelity has written to advisers to notify them of the proposed name change of the fund, which is subject to shareholder approval and full details of the proposal and all relevant documents will be sent out at the end of July.
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