Fidelity unveils new range of 12 Sicav funds

Fidelity International is to offer European distributors 12 new Luxembourgdomiciled Sicav funds, including two groups of core multi-asset and specialist portfolios. The launch of this range is part of the company’s ambitious plan to build a global multi-manager business for both retail and institutional clients. Two multi-asset balanced and diversified funds will provide diversification across cash, bonds and equities, while the global high income product aims to invest in low volatility, actively managed funds, targeting high levels of income. The remaining nine specialist funds include a group of high alpha equity funds aimed at generating returns from a specific geographic region (global, Europe, US, Asia and Japan), two sector portfolios (natural resources and European property) and two emerging market portfolios (global and Europe). Simon Ellis, managing director of Fidelity international’s multi-manager business, said that the launch of these funds wants to meet distributors’ increasing demand for a wider choice of core and specialist multi-manager products to complement the existing range available on the market. “The multimanager business is forecast to grow by 18 per cent on average per year between now and 2009, which is the same as funds of hedge funds – an area generating much attention. But multimanager is a bigger business and easier to operate in,” he said. There has been a proliferation of players in the market recently, said Mr Ellis, and it is important to be able to differentiate themselves from the others. If at the two extremes are “risk mitigators “and “aggressive asset allocators,” the first having an institutional approach aimed at mitigating risk; the second looking at pursing absolute returns by attempting to anticipate market trends – Fidelity aims to position itself in the middle. “We do this by generating alpha through bottom-up fund selection and portfolio optimisation and blend uncorrelated high alpha funds”. He added that the firm wanted to avoid incurring in the pitfalls typical of an institutional approach, with its slower decision-making process and dilution of returns in favour of risk mitigation. At the same time, the investment process will have scale and access to managers, which is what aggressive asset allocators often don’t have. Richard Skelt, chief investment officer investment strategies group at Fidelity, stressed the importance of manager selection, as more consistent contributor to performance than tactical asset allocation.

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Ellis: meeting demands for wider choice