Fidelity India Special Situations Fund (FISSF) is the latest offering from Fidelity Mutual Fund.The fund house defines special situations as out of the ordinary/unusual situations in which companies find themselves; these situations, in turn, offer fund managers with attractive investment opportunities. Investors would do well to understand that a special situations fund is distinct from a contra fund or a value-style fund. In fact the latter would qualify as subsets of a special situations fund.
For example, many value stocks could be the result of special situations; but some growth stocks may also qualify as special situations investment opportunities. Similarly, though every contrarian stock pick might be a potentially special situation, not every special situation is necessarily a contrarian pick. Hence FISSF offers investors a basket of many investment styles within the same fund.
Fidelity has a history of managing special situation funds in countries like UK (the fund has been in existence for over 25 years and has outperformed its benchmark index nearly 6 times over) and USA among others; these experiences can hold the fund house in good stead while managing FISSF. Also, the fund house's expertise in the area of research will aid FISSF's prospects
The fund house's indicated portfolio management style (concentrated holdings and free flowing investment style) suggests that FISSF will be an aggressively managed offering within the diversified equity funds segment. Hence the fund will typically be suited for investors with a flair for high risk investment avenues. Furthermore, it is imperative that investors form a core portfolio consisting of well-managed, conventional diversified equity funds like HDFC Top 200, Sundaram Growth and Fidelity Equity Fund among others before investing in FISSF.
The fund should find a place in investors' portfolios from a diversification perspective, in terms of its fund management style.