View more on these topics

A defensive approach from Fidelity

Fidelity’s equity growth defender fund is an Oeic that  aims to protect growth and investors capital by moving investment between UK equities and cash to maintain a target of 80 per cent above the fund’s highest ever value.

The fund is designed to provide a smoother ride for investors than a pure UK equity fund. It will invest up to 100 per cent in equities, increasing exposure during rising market conditions. If the UK equity market then takes a turn for the worse, it will protect investors’ capital and the gains made during rising market condition by using cash as a shelter.

Equity markets can be volatile, which leaves some investors unsure about the best time to invest. Fidelity’s systematic process, where the allocation between cash and equities is reviewed daily using a computer-based asset allocation model, removes this responsibility from the adviser and client.

Two fund managers share responsibility for the fund. Stephen Fulford oversees the asset allocation model and risk management, while James Griffin – manager of Fidelity MoneyBuilder growth, will manage the equity portfolio.

Fidelity says the fund price should remain above 80 per cent of its highest ever value unless the fund’s equity holdings fall by more than 20 per cent in a day. This would be unusual but Fidelity points out that the protection is a target, not a guarantee.

Funds such as the Investec multi-asset protector fund and Architas multi-manager protector funds use a similar strategy but differ from Fidelity’s fund in that they are multi-asset multi-manager portfolios.

The Fidelity fund could be useful for investors who want the growth potential of equities, which cannot be generated by cash, but are put off by the potential for short-term volatility and the risk of losing money during market declines.

However, the fund may lag a pure equity fund over the long term because it is not always fully exposed to equities. The fund would also have high levels of cash in a severe downturn and could have an uncertain future in market conditions where rebuilding the equity exposure is not possible.


Neptune soft-launches income funds

Neptune has bolstered its fund range with the soft- launch of both a US income fund and a higher income fund. The US income fund will have 40 to 60 holdings, which will predominantly invest in high yielding North American companies. The fund, which sits in the IMA North America sector, is managed by Rebecca […]

Commission rethink on protection sales

The FSA says advisers will not have to disclose commission on protection sales where an adviser charge has been agreed more than a year before the sale. The final rules on pure protection sales state that if an adviser charge has been agreed more than 12 months before the protection sale, then the sale is […]

‘Certify schemes to cut the prospect of levelling down’

Legal & General wants the Government to rubber-stamp existing corporate pension schemes to reduce the likelihood of employers cutting their pension contributions in line with Nest. L&G pensions strategy director Adrian Boulding told delegates at the Personal Finance Society annual conference in Coventry last week that the Government is facing the prospect of employers levelling […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm