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Fidelity increases exposure to risk assets across multi-asset range

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Fidelity head of tactical asset allocation Trevor Greetham

Fidelity has upped its exposure to risks assets across its multi-asset range of funds on the back of a surge in global growth.

The group has added exposure to both equities and commodities to take it from the neutral position it has held since June, to an overweight risk-on stance across the range.

Fidelity head of tactical asset allocation Trevor Greetham says: “We took equities to a large overweight position during recent market weakness. With valuations fair and earnings growth set to improve we think stocks can weather a rise in bond yields.”

While Greetham has increased his commodity investments he has however maintained an overall underweight position relative to other risk assets.

He says: “Commodities could benefit from a stabilisation in China but dollar strength and excess capacity are headwinds.”

In addition, with global growth expanding, Greetham trimmed his positions in the US and Japan equities to shrink underweights in Europe and Asia Pacific.

Greetham however remains underweight in global emerging markets where he believes any positive news coming from China may be outweighed by concerns over a more rapid removal of the Federal Reserve’s quantitative easing programme. He has also cut his allocation to government bonds to the bare minimum.

AWD Chase de Vere head of communications Patrick Connolly says: “With multi-managers moving in this direction, I think the question advisers need to ask is whether fund managers are moving more into risk assets because they are genuinely bullish or is it because they are the best option relative to other assets? While equities have performed well, they still present strong potential risks.”

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