Fidelity Hedged Global Equities aims to achieve returns in excess of the MSCI ACWI (All Country World Index) Index 100% Hedged to AUD over the suggested minimum investment time period of five to seven years. Fidelity’s investment philosophy works on the premise that markets are semi-efficient and share prices don’t always reflect inherent value.
At a sector level, while certain healthcare names hurt returns, exposure to selected communication services and financials holdings proved rewarding. Certain semiconductor stocks came under pressure along with the broader technology sector.
Leading supplier of lithography tools ASML Holding declined in this regard. Renesas Electronics pared gains after very strong performance earlier this year and evidence of solid execution in its business. Within the health care space, HCA Healthcare sold off amid negative investor sentiment over Q3 seasonality impacting revenues, despite ongoing recovery in utilisation and decreasing wage pressures. Medical technology company Masimo underperformed on disappointing quarterly revenues and guidance. LG Chemical detracted from returns, following weaker than expected quarterly earnings.
Brokerage and risk management service provider Arthur J Gallagher outperformed, as strategic buyouts and effective capital deployment continued to drive stock performance. Meanwhile, Berkshire Hathaway delivered strong quarterly results, driven by higher underwriting income. Certain mega cap stocks maintained resilience amid positive developments. In particular, Google’s parent company Alphabet continued to rally, as strong growth prospects of YouTube and its underappreciated cloud business help maintain dominance in the space. Meta Platforms outperformed on the back of strong quarterly earnings, ad targeting capabilities and revenue growth.
What is Fidelity Hedged Global Equities Fidelity Hedged Global Equities is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Currency Hedged 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 Hedged Global Equities has Assets Under Management of 17.70 M with a management fee of 1.04%, a performance fee of 0.00% and a buy/sell spread fee of 0.3%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Fidelity Hedged Global Equities has returned 3.87% in the last month. The previous three years have returned 4.29% annualised and 15.16% each year since inception, which is when the Fidelity Hedged 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 Hedged Global Equities first started, the Sharpe ratio is 0.4 with an annualised volatility of 15.16%. The maximum drawdown of the investment product in the last 12 months is -8.28% and -53.19% 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 Hedged Global Equities has a 12-month excess return when compared to the Foreign Equity - Currency Hedged Index of 3.78% and 0.16% 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 Hedged Global Equities has produced Alpha over the Foreign Equity - Currency Hedged Index of 0.2% in the last 12 months and -0.01% since inception.
What are similar investment products?
For a full list of investment products in the Foreign Equity - Currency Hedged Index category, you can click here for the Peer Investment Report.
What level of diversification will Fidelity Hedged Global Equities provide?
Fidelity Hedged Global Equities has a correlation coefficient of 0.98 and a beta of 1.1 when compared to the Foreign Equity - Currency Hedged 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 Hedged Global Equities and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Fidelity Hedged Global Equities with the Developed -World Index?
For a full quantitative report on Fidelity Hedged Global Equities compared to the Developed -World Index, you can click here.
Can I sort and compare the Fidelity Hedged Global Equities to do my own analysis?
To sort and compare the Fidelity Hedged Global Equities financial metrics, please refer to the table above.
Has the Fidelity Hedged 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 Hedged Global Equities?
How do I get in contact with the Fidelity Hedged Global Equities?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Fidelity Hedged Global Equities. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - June 30, 2023 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 utilisation negatively impacting medical loss ratios (MLR)
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 - 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 hard market. 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.
Mega cap growth holdings declined Alphabet, Amazon.com and Microsoft declined as investors largely moved out of growth-oriented stocks amid the ongoing economic uncertainty. The weaker than expected quarterly earnings, underscoring the growing pressure on digital ad spending, revenue growth and rising labour costs also hurt their performance. Nevertheless, these franchises have been long-term winners with solid fundamentals and operational excellence with an attractive long-term growth potential. Within healthcare, UnitedHealth Group fell after it reported weaker than expected revenue forecast for the upcoming year, ahead of the investor day conference. Healthcare focused industrial conglomerate Danaher also slid, notwithstanding upbeat quarterly earnings.
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 - September 30, 2021 Consumer discretionary names hurt returns Internet retail company Asos declined regarding increased freight costs and global supply chain disruption. Internet group Naspers slid following reports that China government was stepping up efforts to limit online gaming activity.
Key positions detracted over negative news flow
Cable television provider Altice USA underperformed over concerns regarding a short-term negative impact from its fibre buildout strategy and a decline in net customer additions for the upcoming quarter. Food & staples retailer Grocery Outlet Holding’s quarterly sales missed expectations over concerns regarding its ability to retain business gained during the period of COVID-related disruption
It is important to be watchful as global growth momentum moderates and inflationary pressures persist. Elevated market valuations, prospects for tighter monetary policies by major central banks, ongoing challenges around the pandemic, and economic and policy risks in China are likely to present headwinds. While global corporate earnings forecasts for 2021 remain encouraging, forecasts for 2022 have moderated. Overall, the current economic cycle is far from over, although the path of growth and markets’ response are likely to become less predictable going forward.
Given the recent developments, we are cautiously optimistic about the outlook. Increasing vaccination rates and reopenings bode well for developed markets such as the US and UK, although there are risks in the form of higher inflation and the continuing spread of Delta variant of the virus in some areas. Corporate earnings forecast upgrades and rising vaccinations are supportive for Japanese equities, but there are concerns that the continuing emergency measures could weigh on near-term economic growth prospects. Meanwhile, the higher energy prices are likely to affect growth in Europe ex UK, even as political uncertainties exist. Elsewhere, tightening global financial conditions and slower Chinese growth could present challenges for emerging markets, although valuations are still attractive on a historical basis.
Performance Commentary - June 30, 2021 Consumer discretionary names among key detractors Shares in German automaker Volkswagen came under pressure over concerns regarding a global semiconductor chip shortage that hampered production at several plants. Nonetheless, it has a differentiated cash flow generating power owing to its unique suite of brands combined with its scale and newfound investment discipline. Global internet retail company Asos underperformed due to concerns over its ability to maintain growth as customers return to making offline purchases.
Stocks declined on disappointing earnings Digitally focused healthcare company 1Life Healthcare underperformed, as its quarterly earnings missed market expectations. 1life Healthcare has a unique product offering and high-quality care, driven by a diversified set of growth opportunities that enables it to enter new markets. Elsewhere, food & staples retailer Grocery Outlet Holding declined on weaker than expected quarterly earnings due to a fall in comparable-store sales. IT holdings added value Japanese IT company Fujitsu rallied on expectations for robust sales growth and margin improvement due to reorganization and utilizing offshore resources. Shares in Elastic rose as an improved demand environment and multiple tailwinds buoyed growth across the broader platform.. Elsewhere, telecommunications major Cellnex Telecom outperformed owing to resilient and sector-leading organic growth
Performance Commentary - December 31, 2020 ArcelorMittal rose on upbeat market sentiment.
Steel and mining company ArcelorMittal rallied after a stock upgrade boosted investor sentiment. It maintains attractive valuations with reduced balance sheet risk, increasing its potential to rebound strongly once the macroeconomic environment improves.
IT holdings added value
Electronics manufacturer Flex reported solid quarterly results due to continued strength in its health care and solar segment. Videogame developer Unity Software delivered robust revenues driven by superior technological innovation and increasing end user engagement.
Key detractors
Biotechnology major Regeneron Pharmaceuticals lagged in line with defensive sectors. Yet, it issued an upbeat guidance driven by its solid track record in innovation. US biopharmaceutical company Amgen declined after disappointing results in a key final-phase clinical trial for heart ailments. It offers investors a differentiated investment opportunity adding further potential for inorganic growth. Polish video game developer CD Projekt Red slid after numerous glitches were reported by players ahead of its launch.
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