This is Fidelity's flagship investment trust which was launched in 1994 under the management of the legendary Anthony Bolton. After he stepped down in 2007, the trust's performance faltered. However, since Alex Wright took over the management in September 2012, there has been a marked improvement in this trust's performance.
Wright takes a contrarian approach, looking for out-of-favour stocks which he believes are mispriced. Although he can invest across the size spectrum, he tends to find most opportunities and ideas among small and medium-sized companies. This has been to his advantage in recent years, as has his use of gearing.
He says there are two key elements to his investment approach. One is his management of risk. He looks for companies where there is limited risk of price falls. In other words, he wants to invest in companies that have exceptionally cheap valuations or some kind of asset that should stop their share prices falling below a certain level.
Secondly he looks for unrecognised growth potential. So he tries to spot events that could significantly improve a company's earning power, but are not currently reflected in its share price.
Wright also manages the Fidelity Special Situations fund. He takes the same investment approach with both and there is an overlap in their holdings of about 80 per cent. However, he says that because the trust is closed-ended, it gives him confidence to include some smaller and more illiquid holdings in the portfolio.