Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

AAA-rated Wright banks on Barclays despite shares continued decline

AAA-rated Wright banks on Barclays despite shares continued decline

Fidelity's Citywire AAA-rated small cap star Alex Wright says Barclays still has potential for upside, despite its H1 profit coming down year-on-year and its £5.8 billion rights issue.

Wright, who runs the Fidelity Special Values investment trust and the Fidelity UK Smaller Companies fund, says the bank has already accounted for the continued stream of payment protection insurance (PPI) claims, while its rights issue, intended to plug a £12.8 billion capital hole, was reflected in earlier dips in Barclays' share price.

Following its H1 results, Barclays shares fell  5.7% and have continued to drop today. At 13.00 they were trading at 287.6p, a fall of 1.2% on the opening price.

Wright (pictured) said the shares' continued decline means an investment in Barclays looks compelling.

He said: 'The upside for Barclays is still significant, with strong franchises in investment banking, UK retail and a leading African banking business, and with the downside now more quantifiable as a result of this rights issue, I am comfortable holding more of the company’s shares.

Wright added: 'This fundraising, combined with the very cautious provision for PPI claims, creates a strong basis for Barclays to make progress, both operationally, and in its relationship with the regulator.'

Wright inherited a position in Barclays after taking over the Special Values Investment Trust from Sanjeev Shah last July.  At the end of June he held 2.2% of his assets in the bank's shares.

Although the bank has endured its difficulties, this has not held Wright back. He has grown his £474 million trust's net asset value (NAV) per share by 56.76% over the three years to April, versus a rise of 32.3% by the FTSE All-Share Index.

Compared to the typical UK smaller companies manager Wright has also outperformed.  According to Citywire data he has delivered total returns of 125.5% over three years, compared to his average peer's 63.7% total return.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter