The Fidelity Global Equities Fund is designed to be a core holding for investors seeking the growth and diversification benefits of global equities, with an experienced fund manager. The Fund seeks to invest in the winners of tomorrow and has a 20-year proven track record of solid performance through market cycles, selecting companies with strong management teams, leading innovation and sustainable pricing power which operate in industries that they believe will benefit from future themes.
The Fund delivered positive returns and outperformed the index over the quarter. At a sector level, robust security selection within the financials sector buoyed performance, while exposure to the consumer discretionary sector holdings hurt returns. Marvell Technology rallied, as potential for a boom in AI technologies drove strong performance for chipmakers. Renesas Electronics contributed to returns, on the back of solid quarterly revenues and earnings guidance. In contrast, the lack of exposure to semiconductor company Nvidia weighed on relative returns, as the stock rallied on the back of stellar revenues and earnings guidance for the upcoming quarter. Meta Platforms, and Amazon.com delivered robust quarterly earnings results driven by revenue growth and margin improvement. Alphabet outperformed, following optimism surrounding rapid advances in generative AI. Conversely, the underweight stance in Apple held back relative returns, as the investors looked for relatively safe haven stocks amidst market volatility. Elsewhere, Arthur J Gallaghar delivered solid top-line revenue growth and positive momentum in new businesses.
Diversified conglomerate company Berkshire Hathaway reported strong quarterly earnings driven by higher underwriting income and Net Interest income (NII). Alibaba Group Holding declined as quarterly earnings missed estimates. Danaher underperformed as the company is going through a trough cycle and revised down its 2023 revenue guidance, driven lower by biotech funding challenges. UnitedHealth Group fell over concerns regarding increased outpatient utilization negatively impacting medical loss ratios (MLR).
What is Fidelity Global Equities Fidelity Global Equities is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Growth Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Fidelity Global Equities has Assets Under Management of 431.50 M with a management fee of 0.99%, a performance fee of 0.00% and a buy/sell spread fee of 0.6%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Fidelity Global Equities has returned 1.53% in the last month. The previous three years have returned 8.75% annualised and 12.67% each year since inception, which is when the Fidelity Global Equities first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Fidelity Global Equities first started, the Sharpe ratio is 0.14 with an annualised volatility of 12.67%. The maximum drawdown of the investment product in the last 12 months is -4.31% and -55.3% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Fidelity Global Equities has a 12-month excess return when compared to the Foreign Equity - Large Growth Index of -0.96% and -2.17% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Fidelity Global Equities has produced Alpha over the Foreign Equity - Large Growth Index of 0.27% in the last 12 months and -0.2% since inception.
What are similar investment products?
For a full list of investment products in the Foreign Equity - Large Growth Index category, you can click here for the Peer Investment Report.
What level of diversification will Fidelity Global Equities provide?
Fidelity Global Equities has a correlation coefficient of 0.93 and a beta of 0.78 when compared to the Foreign Equity - Large Growth Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Fidelity Global Equities and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Fidelity Global Equities with the Developed -World Index?
For a full quantitative report on Fidelity Global Equities compared to the Developed -World Index, you can click here.
Can I sort and compare the Fidelity Global Equities to do my own analysis?
To sort and compare the Fidelity Global Equities financial metrics, please refer to the table above.
Has the Fidelity Global Equities been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Fidelity Global Equities?
How do I get in contact with the Fidelity Global Equities?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Fidelity Global Equities. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - March 31, 2023 The Fund delivered positive returns and outperformed the index over the quarter. At a sector level, exposure to communication services proved rewarding, while certain financials sector holdings held back returns.
Alphabet rallied as it unveiled new artificial intelligence (AI) capabilities for its suite of productivity apps. Meta Platforms reported robust quarterly revenues boosted its share buyback programme. Shares in Alibaba Group Holding outperformed following the announcement of significant restructuring plans within the company. Within IT, Renesas Electronics contributed to returns as net profits increased, supported by strong demand for chips. The holding in Salesforce rose after it raised its forecast for profit margins and doubled stock buyback plans. In contrast, the lack of exposure to Nvidia weighed on relative returns. The stock rallied strongly over the quarter on optimism around generative AI which drove an acceleration in demand. The underweight stance in Apple also held back relative gains as shares rose amid expectations that the company would move into the rapidly expanding augmented reality arena. Shares in diversified conglomerate holding company Berkshire Hathaway lagged the broader market. The collapse of SVB and issues related to troubled Swiss lender Credit Suisse led to significant volatility in the US and European banking stocks. In particular, Wells Fargo came under pressure amid heightened risk aversion as well as contagion fears in the overall financial sector.
Performance Commentary - January 31, 2023 The Fund generated a return of 4.0% compared to the index which returned 3.1% during the month. At a sector level, while certain financials sector names held back gains, exposure to the consumer discretionary sector proved rewarding. At a stock level, shares in Chinese e-commerce major Alibaba Group Holding rebounded amid increased investor optimism surrounding the reopening of China’s economy given pent up demand and an improving regulatory backdrop. The company’s ecosystem has superior breadth and depth and is the foundation of the highly sticky merchants and consumers, which ultimately supports its pricing power. Certain quality growth compounders such as Google’s parent company Alphabet and technology conglomerate Amazon.com outperformed following a rebound in growth stocks on anticipation that the Fed may slow its tightening activity. These businesses demonstrate solid long-term fundamentals along with a coveted brand loyalty. An attractive growth runway and margin potential buoyed by structural behavioural shifts, new growth initiatives and a keen focus on profitability also bodes well in the long term.
Elsewhere, the holding in General Electric reported stronger than expected quarterly earnings and spun off its medical technology unit. The company is a self-help story with a pathway to higher margins and organic growth in the aviation, renewable and power segments. Its corporate simplification efforts are expected to release value.
In contrast, the conviction holding in UnitedHealth Group fell despite reporting upbeat quarterly earnings. The company offers best in class services in comparison to peers, while the continued shift from traditional Medicare fee-for-service to Medicare Advantage (MA) is driven by better patient outcomes and better healthcare resource utilization. Shares in health care focused industrial conglomerate Danaher slid following a cautious revenue outlook for the year 2023, majorly driven lower by Covid related revenues. However, long term growth avenues for Danaher remain strong, anchored by bioproduction and molecular diagnostics segment growth. Despite reporting upbeat quarterly results, Axis Bank came under pressure over investor concerns about the exposure of the Indian banking sector to the Adani Group, accused of fraud and stock manipulation. However, our preliminary analysis suggests that the impact on Axis Bank will be limited. It maintains a leading position in the private sector with improving asset quality and substantial income fee from transaction and merchant banking activities.
Performance Commentary - December 31, 2022 The Fund delivered positive returns and outperformed the index over the quarter. While financials positions contributed in a high interest rate environment, the Fund’s strong orientation towards quality and growth stocks was negative as holdings in mega cap tech space along with healthcare declined.
Certain financials holdings buoyed returns
Investors remained positive about reinsurer Renaissancere Holdings’ strong capital capacity to deploy and grow in a hardmarket. Indian banking franchise Axis Bank delivered robust quarterly revenues driven by higher net interest income margins. Elsewhere, the lack of exposure to electric vehicles manufacturer Tesla and an underweight stance in iPhone maker Apple contributed to relative returns as negative investor sentiment coupled with supply issues in respective end markets weighed on shares.
Performance Commentary - September 30, 2022 Financials positions buoyed by upbeat quarterly results Insurance company Arthur J Gallagher delivered robust revenues on the back of strong organic growth in its brokerage business. Diversified conglomerate holding company Berkshire Hathaway outperformed following strong quarterly results owing to higher favourable development within the Reinsurance segment. The holding in Charles Schwab rose, driven by the company’s inorganic growth efforts and initiatives to augment trading revenues.
Healthcare names added value UnitedHealth Group continues to benefit from stable healthcare utilization, favourable pricing environment and potential Medicaid expansion in the long term. Healthcare-focused conglomerate Danaher and US hospital operator HCA Healthcare delivered upbeat quarterly earnings, beating market expectations.
Key detractors Not owning shares in electric vehicle manufacturer Tesla weighed on returns as the stock outperformed following strong quarterly results. Chinese technology major Alibaba Group Holding came under pressure over a cyber security breach related to AliCloud. Elsewhere, the underweight stance in technology conglomerate Apple detracted from relative performance as the stock rallied following upbeat quarterly revenues. Google’s parent Alphabet pared gains, despite reporting better-than-expected quarterly earnings. It maintains strong competitive advantages and an excellent track record of innovation.
Performance Commentary - June 30, 2022 The Fund returned -9.3%, while the index returned -7.9% during the quarter. At a sector level, while industrials and consumer discretionary holdings hurt returns, selected health care names proved rewarding. Amazon.com came under pressure over weaker than expected sales forecast for the upcoming quarter. Cognex underperformed following disappointing earnings guidance, citing a slowdown in automation projects. The company’s industry leading vision and technologies give it a differentiating edge compared to its peers. Elsewhere, Intercontinental Exchange fell, notwithstanding upbeat quarterly performance. Certain growth stocks continued to remain under pressure as valuation compression dragged prices lower.
Consequently, the holding in Uber Technologies fell in this regard. General Electric declined as a series of macro headwinds weighed on stock performance. UnitedHealth Group added value, as managed care companies continued to benefit from a rising interest rate and stagflationary environment. Bristol Myers Squibb delivered strong quarterly earnings driven by robust in-line product growth, increased adoption of new product portfolio and strong commercial execution. Quality insurance franchises such as AIA Group and Arthur J Gallagher continued their upward growth trajectory, benefiting from strong pricing, prudent underwriting, and an improving rate environment. Elsewhere, Dutch internet conglomerate Prosus added value buoyed by strategic reinvestments and the recent sale of its stake in Tencent to fund share buybacks.
Performance Commentary - March 31, 2021 Robust security selection in the consumer discretionary and energy sectors added value, while certain communication services holdings detracted from returns. Energy holding buoyed performance Shares in Texas Pacific Land rose led by the cyclical rebound in crude oil prices. It has a large royalty position in the Permian basin and has maintained its profitability in a turbulent environment, due to its low need for maintenance capital. Global independent energy company Hess reported solid quarterly earnings due to higher production in the Bakken play and lower operating expenses. It remains focused on improving capital and operational efficiencies as its asset are starting to become meaningful cash flow generators
Performance Commentary - February 28, 2021 Designed to be a core international holding of 80-120 of Fidelity’s best global ideas, researched by our 400 experienced investment professionals located around the world. A truly active manager, we take a 360 view of every company we invest in, refreshing our views every 120 days to ensure we take advantage of the best opportunities globally and have a portfolio built with conviction. Stock selection favours mis-valued businesses and structural growth stories
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