Fund of the week: Anthony Bolton’s contrarian outlook

published 19 January 2006

Anthony Bolton, manager of Fidelity's Special Values investment trust, has made a name for himself by going against the grain buying undervalued shares with recovery potential.

And this year looks like it will be no different, says Richard Lander in The Daily Telegraph. While the rest of the market is nervous about consumer-related stocks, Bolton now says he thinks they look cheap. And while the media sector may look miserable to most of us, it accounts for 14% of Bolton's fund, thanks to the fact that share prices in the sector are at their lowest relative to the rest of the market since 1991.

He is just as contrarian on the market as a whole. Most managers are pretty bullish but Bolton argues that, while it still has some bang left in it, the current run is near its end.

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"We are now 33 months from the bottom and I think we are in the late stage of this bull market. There have been 12 bull markets over the past 40 years and the average has lasted 25 months. Only two have been longer than the current one," says Bolton.

Bolton has "one of the most enviable records in the City", says The Sunday Times. He was one of the first to call the bull market in June 2003 and over the past five years has delivered growth of 109.7% for his trust. Preparing his trust for the "often very good" last phase of the bull market, he has been moving into blue chips, such as Tesco, BG and BP. These, he says, offer greater security and better value at the moment: "speculative, low-quality companies will take the hit when markets top out". Note that Bolton is due to retire at the end of 2007.

Contact: 01732-361 144, www.fidelity.co.uk

Fidelity Special Values investment trust top ten holdings

Name of holding % of assets

BP 4.8%

BG Group 4.7%

Standard Chartered 3.8%

Statoil 3.6%

Cairn Energy 3.5%

Roche Holding AG 3.4%

ITV 3.2%

British Land Co 2.8%

GlaxoSmithKline 2.5%

Hilton Group 2.2%

Emma is a former digital journalist with more than 15 years of experience in national news in the UK and overseas. She was an assistant editor at MoneyWeek, covering property, funds, alternative investments and the share tips pages, then Emma moved on to The Daily Telegraph, first as a personal finance reporter and then as a business reporter.

Emma also worked as a finance correspondent for Ninemsn (Australia’s Channel 9 online) in Sydney, Australia for just over a year, and since then Emma has worked at Channel 4 News as a reporter and producer, and she spent more than 4 years at BBC online. At present Emma is a senior manager for content and thought leadership at PwC.