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Why the Fidelity FIRST Global Fund?

Why the Fidelity FIRST Global Fund?
Matthew Jones and Hiten Savani are the co-portfolio managers of the Fidelity FIRST Global Fund and have known each other since 2005. The Fund is an actively managed portfolio, accessing a core holding of global shares. The key to their portfolio construction process is the true belief in the deep, fundamental research of Fidelity’s analysts that is unique and unavailable outside of Fidelity. “The analysts are the DNA of Fidelity” Hiten describes. 
 
The Fund is designed to deliver investors strong risk-adjusted returns through bottom up stock selection. 
 
The philosophy 
Matt and Hiten hold their hat to having a consistent, repeatable process to deliver alpha to clients. Their philosophy starts with capturing the highest conviction stock recommendations from Fidelity’s analysts globally. They implement stock ideas by targeting stock selection as the primary risk & return driver. “Our outperformance is uncorrelated with any other factors” Hiten says. 
 
The process
The three step process that generally determines what stocks to include in the Fund is explained below.

Source: Fidelity International. Please note: the numbers quoted on this slide are illustrative of a global portfolio.

1. Analyst’s highest conviction buy recommendations: Globally, Fidelity's analysts cover approximately 2,500 companies of which approximately 1,200 are buy-rated.

2. Alpha identification and stock research: Buy rated stocks are assessed against 7 proprietary signals. 

Analyst signals:
i) Research ratings
ii) Ratings momentum
iii) Ratings conviction
iv) Ratings recency
 
External confirmatory signals: 
v) Consensus ratings
vi) Earnings revisions
vii) Valuation
 
These signals are all measured resulting in a Conviction List.
 
3. Portfolio construction & Portfolio Manager Review: The ‘Conviction List’ of approximately 150 stocks is considered the raw material for the portfolio construction process. The portfolio managers then use a Barra optimisation risk tool to maximise the expected risk adjusted return relative to the index and results in an initial portfolio of 75-85 holdings. 
 
The Portfolio Managers evaluate each holding in the portfolio to ensure a suitable portfolio structure and mitigate biases not consistent with the analysts' views. Risk is primarily driven by stock-specific factors. 
 
They review each stock to ensure:
i) Level of conviction in analyst rating
ii) Suitability of investment theses
iii) Appropriate technical conditions
iv) Meets fund’s characteristics
 
The stocks that fail the portfolio manager review are replaced. There is consistent daily analysis of portfolio alpha, risk structure and adherence to the Fund. 
 
The Fidelity FIRST Global Fund is now available to investors in Australia. 
 
 “I have always been attracted to intellection stimulation. I love having a difficult problem to solve and being surrounded by bright people. The role I have at Fidelity gives me just that”
Hiten Savani, Portfolio Manager, Fidelity FIRST Global Fund.
 
This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”).  Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.

Investments in overseas markets can be affected by currency exchange and this may affect the value of your investment. Investments in small and emerging markets can be more volatile than investments in developed markets.


This document is intended for use by advisers and wholesale investors. Retail investors should not rely on any information in this document without first seeking advice from their financial adviser.  You should consider these matters before acting on the information.  You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise. 

© 2017 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited. 

This website is intended to provide general information only and has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information and consider the relevant Product Disclosure Statement for any product named on this website before making an investment decision.

© 2017 FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340.
Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL limited.

This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 ("Fidelity Australia"). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International. Prior to making an investment decision retail investors should seek advice from their financial adviser. Please remember past performance is not a guide to the future. Investors should also obtain and consider the Product Disclosure Statements ("PDS") for the fund mentioned in this document. The PDS is available on www.fidelity.com.au or can be obtained by contacting Fidelity Australia on 1800 119 270. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider such matters before acting on the information contained in this document. This document may include general commentary on market activity, industry or sector trends or other broad based economic or political conditions which should not be construed as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be construed as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care no responsibility or liability is accepted for any errors or omissions or misstatements however caused. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity funds is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. References to ($) are in Australian dollars unless stated otherwise. © 2017 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International, and the Fidelity International logo and F symbol are trademarks of FIL Limited.