Fidelity to launch two multi-asset funds
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Fidelity International is planning two new products for Trevor Greetham, its asset allocation director and multi-asset specialist.
The multi asset defensive and multi asset growth funds will sit alongside the existing £238m multi asset strategic fund. Both products will aim for capital growth through a portfolio of bonds, cash, commodities, equities, and property.
Multi asset defensive will allocate a larger proportion of its assets to bonds and cash than multi asset strategic, giving the fund a low risk profile suitable for investors with a shorter-term time horizon. Its benchmark will be 50 per cent UK bonds, 25 per cent cash, 15 per cent UK & global equities, 5 per cent global real estate, and 5 per cent commodities. It will sit in the Investment Management Association (IMA) cautious managed sector.
Multi asset growth will allocate more to equities, commodities, and property, aiming for equity-like returns over the long term but with a lower level of volatility. The benchmark will be 20 per cent UK bonds, 5 per cent cash, 50 per cent UK & global equities, 10 per cent global real estate, and 15 per cent commodities. It will sit in the IMA active managed sector.
All three funds in the range will be able to take tactical asset allocation positions in response to a range of market conditions. To determine the asset mix, Greetham uses an investment approach which relates asset rotation and sector strategy to the economic cycle, Fidelity says.
In a statement, Greetham says: “The uncalibrated and massive nature of the authorities’ intervention in 2008/9 is not a recipe for economic stability. Policy-makers panicked after Lehman was allowed to fail and I expect a continuing boom/bust cycle for some time as they try to dampen down some extremely pronounced cycles.
“This backdrop argues for flexible tactical asset allocation and a multi-asset approach to investing. Low correlations between equities, bonds and commodities mean diversification is working better than ever.”
Minimum investment in both funds is £1,000. The initial charge on both is 3.5 per cent but other charges vary.
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