Fidelity reveals what it takes to find tomorrow's large caps today

This article first appeared in Livewire Markets on 16 May 2023

A lot of money can be made by buying large cap stocks that have potential to grow further. Yet a lot more money can be made by investing in those companies when they're still small or mid cap stocks. 

The Fidelity Global Future Leaders Fund, which started life in September 2020, looks for just these sort of companies. The fund focuses on undervalued quality companies, but it doesn't shy away from a bit of momentum if the company bears those quality characteristics and is trading at an attractive price. 

It's a strategy that has returned 10.92% per annum since inception, beating the index by 1.41% per annum. That's impressive when you consider this is a balanced portfolio more designed to form the core of investor's portfolio. It prioritises consistent returns over the kind of volatile returns you often see in funds that play in this end of the market.  

For today's Undiscovered Funds Series Q&A, I sit down with James Abela, Co-Portfolio Manager of the Fidelity Global Future Leaders Fund alongside Maroun Younes. James discusses the three key attributes leading small and mid cap stocks will need to have to outperform through the next 12 months, the sectors with the best free cashflow yields, and his high conviction pick - a beaten down German energy stock.  

Note: This interview was filmed on May 2, 2023.