How to access an under-researched segment of the market

This article first appeared in Livewire markets on 23 May 2023

Generating alpha in today's equity market means looking where others aren't.

There is a constant trade off in markets. In order to find opportunities in underpriced stocks, one has to move down the market cap spectrum. But with that comes increased volatility. 

On the other hand, large cap stocks have less volatility but they're well researched and often crowded.  

At Fidelity, we believe the choice between one and the other isn't binary.  

The Fidelity Global Future Leaders Fund targets global mid-caps, typically companies that possess a market capitalisation of anywhere from US$1 billion up to about US$35 billion. We think that companies of this size occupy a sweet spot in the market. 

Although large caps have performed well over the last decade, it's historically global small or mid-caps that have actually outperformed their larger peers.

In this Fund in Focus, I run you through the investment case for global mid cap stocks, how our process finds the best of them, and also identify two companies we have high conviction in right now.