His comments come in light of Fidelity’s decision to pull the flagship fund from its own Select List of recommended funds.
"The fund is still on our buy-list despite underperformance," said Yearsley, an investment manager at Hargreaves. "The problem with many of the industry’s lists of recommended funds is that they focus on what has happened rather than the potential. They are too backward looking."
While Fidelity says that poor rolling three-year numbers are the reason for re-rating the fund, its performance has been good so far in 2012. Year to date, FE data shows it has returned 14.23 per cent versus 8.82 per cent from the average UK All Companies fund.
Performance of fund vs sector in 2012
Source: FE Analytics
Under the stewardship of star manager Anthony Bolton, Fidelity Special Situations was one of the most successful funds of its generation.
Since Shah took over at the start of 2008, however, performance has lagged the competition. The fund has returned 57 per cent over the last three years – a solid return in absolute terms, but some way off the sector average of 70 per cent.
Performance of fund vs sector over 3-yrs
Source: FE Analytics
However, Yearsley believes Shah’s highly contrarian approach needs to be given more time.
"Sanjeev has only been managing the fund for four years and investors need to be more patient. The internet has made investing much more convenient but being able to check your portfolio every minute of every day has made everyone much more short-term focused," he said.
Cazenove’s Robin McDonald, who co-manages the group’s range of multi-manager offerings, has been adding to his Fidelity Special Situations exposure in line with improvements in the economic environment.
"Sanjeev has had a tough run in recent years and I think he’d be the first to admit that. We rate him and always have done very highly, but this hasn’t been his market," McDonald said.
"However, we hope and indeed expect that this next period is going to be more kind to his approach and his portfolio."
The £2.4bn fund is overweight highly cyclical sectors such as retail, banks, media and house builders.
Bestinvest’s Adrian Lowcock says this type of exposure is best suited for the investor with a positive outlook on the global economy.
"We took the fund off our buy-list in October 2011 at the height of the boom in defensive stocks, but we are constantly reviewing funds’ performance," he explained.
"A significant key to Sanjeev’s fund could be a strengthening of the US dollar and a subsequent pick-up in the global economy. His approach is aggressively contrarian and the sectors he is exposed to are more reliant on a recovery, though there are now signs of that."