A core holding which invests in a diversified selection of around 30 - 50 Australian companies.
Uses a bottom-up stock-selection approach that focuses on undiscovered earnings potential, value and growth.
Conducts regular company, factory and competitor visits to assess business strength, earnings quality and long-term growth outlook.
The same highly experienced portfolio manager since 2003, backed by a highly experienced team.
A diversified portfolio with a consistent, rigorous investment approach.
Strong fund ratings from professional research houses.
EDITED TRANSCRIPT
I just love finance, I love investments. My mum and dad were small business people and we talked a lot about their small businesses, how they made money. What were the good parts, what were the bad parts? What was the business strategy? I just loved that stuff.
I was initially attracted to Fidelity at business school. I went to London Business School and did a Master's of Finance. Fidelity was the name I was interested in. All the great portfolio managers like Peter Lynch and Anthony Bolton - all I wanted was to be like those guys.
Fidelity is a bottom-up stock selection house which I love. It's all about understanding businesses, how they make money, and that was right down my alley.
The Fidelity Australian Equities Fund is trying to outperform the Australian market, and we have done that over 22 years. We do that by meeting the whole market every quarter, doing our own proprietary earnings, cash flow, evaluation balance sheet model, understanding the management team, do it in a risk-controlled way, 30 to 50 stocks.
Long term investment is about taking a 5–7-year investment horizon. We look through the short-term noise to find the great quality long term companies and we think that will deliver a better retirement for Australians and also a better savings as well.
I'm part of this amazing intellectual debate about companies and markets and economies, but I get to apply it to a very manageable universe, and I think Australia’s a great market with good corporate governance, good shareholder protection rights, and really interesting companies.
I've been with Fidelity for 28 years. I think I've been through about ten different crises: Russian Bond default, Tech wreck, Asian crisis, SARS, Covid, Global Financial Crisis, tariffs, trade wars.
There's a great quote that history doesn't repeat, but it rhymes. And I think there's something in that. Through each crisis, I learn a little bit more. I feel much better positioned today than when I did 28 years ago.
Portfolio Manager of the Fidelity Australian Equities Fund, Paul Taylor describes his love of markets, investments and his overarching goal to provide strong long-term returns to clients to help meet their investment goals.
EDITED TRANSCRIPT
My investment process can be broken into two parts.
Firstly, ‘get out and see the market’. Fidelity is a bottom-up stock selection firm, so we meet the whole Australian market every quarter. We rate stocks from 1 to 5: 1 = strong buy, 5 = strong sell. It's really an industrialised process where we meet the whole market, whether we love the company, hate the company, or anywhere in between, whether we own it or we don't own it. We typically will have maybe a 100 buy rated stocks that come out of that investment process.
Secondly, as the portfolio manager, I'm then trying to pick the best 30 to 50 stocks to go into the portfolio to deliver that outperformance for our clients.
I manage risk in the portfolio in a couple different ways. One is through holding 30 to 50 stocks. Below 30 is not really a diversified portfolio and above 50, you start to get too close to the market. So, to me, 30 to 50 is really a sweet spot. It's got enough oomph to deliver outperformance, but it's doing it in a very risk-controlled way. We do plus or minus 5% at a stock level, plus or minus 7% at a sector level. We’ll maintain up 5% cash. It's really trying to deliver that outperformance in a risk-controlled way.
Suncorp’s a great example of showcasing my investment process. Suncorp always traded at a discount to its peers. It’s a company that fell between the cracks, forgotten about, at discount because it's complex. On top of that it was always a bit of a forgotten about stock, which is one of the things I look for. I want to differentiate from the market. What's our thinking relative to what the market's thinking is? I think there was a big difference at Suncorp. Suncorp went through the process of selling the life insurance business, selling the wealth management business, selling the repairs business, and finally selling the bank. They are now just a general insurance business. They're also going through the process of seeing a valuation uplift because now people go ‘well actually they're comparable with the other general insurance companies, they should get that same multiple’.
Good earnings, improving valuation, really attractive capital base - and that was different from the market and that's led to good returns from Suncorp.
Portfolio Manager of the Fidelity Australian Equities Fund, Paul Taylor, talks about how he uncovers investment opportunities through the Fund's tried and tested approach.
EDITED TRANSCRIPT
Over the quarter, the market was slightly down, so almost 3% down. The reporting season in February, probably a few more disappointments than beats. Most of those disappointments really were related to, maybe not quite good cost control by companies or those companies that didn't perform well, really cost control was one of the major issues, almost 3% down for the quarter.
The Fund actually outperformed the market, which was a great result. That was really driven from the February reporting season. We actually had some great, a lot of our investments did quite well. But what was really pleasing to see was we actually started to see a lot of differentiation within sectors, which means we're coming back. We're moving away from the macro.
We're moving towards a much more micro bottom up, stock movements. In the banks, the Commonwealth Bank had a great result, performed well. NAB, bad result performed poorly.
The other two somewhere in between. In the insurance companies, Suncorp had a great result, performed well. IAG, a poor result, mainly through cost control and performed badly. QBE somewhere in the middle.
Supermarkets. Coles great result. Woolworths, weaker result, really got to do with cost control as well. So, what we're seeing is within sectors you’re actually now starting to get differentiation and the fund was more weighted to some of those, better performing stocks within those sectors.
Outlook is for volatility. We did see a lot of volatility in February. Liquidity isn't fantastic at the moment. So, when a stock did well it shot up. When a stock did poorly it really got hit hard, maybe a little bit too much both ways. But I think that volatility is going to stay with us for a while. As we've moved into February, we're seeing some of the consequences of the trade war or trade barriers, tariffs, as well as maybe the consequences of what those tariffs can cause to the economy.
So now there's an increased chance of recession in the U.S. and maybe less in Australia, but still the probability has increased which generally causes a lot more volatility.
For the corporates themselves, actually balance sheets are pretty strong. So, I think most companies are in a good position. If we do, if the economy does worsen. I invest over a 5-to-7-year horizon. So, while there's a lot of noise at the moment, a lot of volatility at the moment, if you can look through that, and I think that's what creates the long-term opportunities, if you can look through that to the 5-to-7-year view, I think you are actually in a much more positive light.
Join Portfolio Manager Paul Taylor as he provides an update on Aussie markets, looks at the main contributors and detractors to performance and how positioning for the portfolio is currently given the market outlook.
See for yourself how the fund has performed since inception. The chart below represents the value now of $10,000 invested in the Fidelity Australian Equities Fund in June 2003 compared with $10,000 invested in the S&P/ ASX 200 Accumulation Index.
Chart as at: 31 May 2025
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: S&P ASX 200 Accumulation Index.
Net returns as at 31 May 2025
| Timeframe | 1 yr % |
3 yr % pa |
5 yr % pa |
7 yr % pa |
10 yr % pa |
15 yr % pa |
20 yr % pa |
Since inception (30/06/03) % pa |
|---|---|---|---|---|---|---|---|---|
| Fund | 12.30 | 6.53 | 11.08 | 8.32 | 7.75 | 9.12 | 9.61 | 10.90 |
| Benchmark | 13.36 | 9.62 | 12.11 | 9.06 | 8.12 | 8.84 | 8.14 | 9.30 |
| Active return | -1.06 | -3.09 | -1.03 | -0.74 | -0.37 | 0.28 | 1.47 | 1.60 |
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: S&P ASX 200 Accumulation Index.
Net as at 31 May 2025
| 1 yr % |
3 yr % pa |
5 yr % pa |
7 yr % pa |
10 yr % pa |
15 yr % pa |
20 yr % pa |
Since inception (30/06/03) % pa |
|
|---|---|---|---|---|---|---|---|---|
| Total return | 12.30 | 6.53 | 11.08 | 8.32 | 7.75 | 9.12 | 9.61 | 10.90 |
| Growth | 4.04 | -1.16 | 3.68 | 2.18 | 2.50 | 4.38 | 4.80 | 6.12 |
| Income | 8.26 | 7.69 | 7.40 | 6.15 | 5.25 | 4.74 | 4.80 | 4.78 |
Growth return is the unit price movement on exit to exit basis. Income is expressed as Total Return less growth component.
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: S&P ASX 200 Accumulation Index.
| Distribution | Distribution (CPU) | Reinvestment price |
|---|---|---|
| 31-Mar-25 | 3.0547 | $35.2350 |
CPU = cents per unit. The above cash CPU excludes imputation credits and foreign income tax offsets which are non-cash components and are reported in the end of year tax statement. If the Distribution CPU column is 0.0000 it means that nothing was distributed.
As at 31 May 2025
As at 31 May 2025
| % total net assets | |
|---|---|
| COMMONWEALTH BANK AUSTRALIA | 15.2% |
| BHP GROUP LTD | 8.3% |
| EVOLUTION MINING LTD | 6.7% |
| COLES GROUP LTD | 6.0% |
| SUNCORP GROUP LTD | 5.9% |
| MACQUARIE GROUP LTD | 5.8% |
| GOODMAN GROUP | 4.9% |
| SEEK LTD | 4.8% |
| RIO TINTO LTD | 3.9% |
| CSL LTD | 3.4% |
As at 31 May 2025
| Fund % | Benchmark % | Relative % | |
|---|---|---|---|
| EVOLUTION MINING LTD | 6.7 | 0.7 | 6.0 |
| SUNCORP GROUP LTD | 5.9 | 0.9 | 5.0 |
| COLES GROUP LTD | 6.0 | 1.1 | 4.8 |
| SEEK LTD | 4.8 | 0.3 | 4.4 |
| COMMONWEALTH BANK AUSTRALIA | 15.2 | 11.6 | 3.5 |
As at 31 May 2025
| Fund % | Benchmark % | Relative % | |
|---|---|---|---|
| NATIONAL AUSTRALIA BANK LTD | 0.0 | 4.6 | -4.6 |
| WESFARMERS LTD | 0.0 | 3.7 | -3.7 |
| TELSTRA GROUP LTD | 0.0 | 2.2 | -2.2 |
| TRANSURBAN GROUP | 0.0 | 1.7 | -1.7 |
| WOODSIDE ENERGY GROUP LTD | 0.0 | 1.7 | -1.7 |
| Organisation | Rating / Recommendation |
|---|---|
| Lonsec |
Recommended4
The Lonsec report is only available to financial advisers, please contact us for a copy |
| Morningstar | Gold5 |
| Zenith | Recommended6 |
This Fund is subject to the risk of stock market fluctuations. Investors accessing the Fund through a master trust or wrap account will also bear any fees charged by the operator of such master trust or wrap account. Any apparent discrepancies in the numbers are due to rounding.
1 Management fees and costs are current as at the date shown above but may be subject to change in the future. Management fees and costs include management fees, estimated indirect costs, the net effect of GST and exclude abnormal expenses, transaction costs and any performance fee payable
2Total returns (net) have been calculated using exit prices and take into account the applicable buy/sell spread and are net of Fidelity’s management costs, transactional and operational costs and assumes reinvestment of distributions. No allowance has been made for tax. Returns of more than one year are annualised. The return of capital is not guaranteed.
