What Fidelity MultiManager
funds are available?
In September 2006 we launched a new open-ended
Luxembourg-based investment company (SICAV) which
contains a series of multi-manager investment
portfolios. These portfolios, which consist of
underlying funds managed by third party fund
managers, are grouped into five types: Income,
Multi-Asset, High Alpha, Specialist Sector and
Emerging Market. Within each are a
number of funds - the funds are detailed here.
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Why has Fidelity launched a
multi-manager business?
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Fidelity has been managing fund-of-funds and
multi-asset class portfolios for almost 20 years.
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Our proven and growing reputation in this sphere
of investment management has brought increasing
requests from clients to bring more products to
market. Many of our clients value this added
service of market fund research, selection and
portfolio construction, and we have the existing
skills to provide such a service.
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Fidelity recognises the importance of offering
investors a range of flexibly invested
multi-manager funds that cover a broad spectrum
of risk.
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How well-placed is Fidelity
to cope with growth in the multi-manager sector?
The investment and operational processes that
underpin Fidelity's MultiManager operation are
designed to cope with significant client interest.
The Fidelity MultiManager range of funds was
launched in anticipation of increasing demand for
specialist as well as multi-asset funds.
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Under which circumstances
would a single-manager fund make sense?
For certain customers, single-manager products may
have more appeal than multi-manager products.
Single-manager products will naturally be more
volatile than a diversified multi-manager product,
but may perform better over shorter time horizons if
the style of the fund is aligned with the current
market characteristics and the manager is performing
well. Of course, the converse can also be true.
In order to meet the needs and preferences in all
asset classes, Fidelity believes in offering a broad
range of products. We offer these products in a
number of different types of portfolios:
'unfettered' multi-manager funds (funds
which comprise of Fidelity and third party funds),
'fettered' multi-manager funds (funds which
comprise of other Fidelity funds) and single-manager
funds.
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What makes Fidelity
well-positioned to run multi-manager funds?
Fidelity has a long association with the
fund-of-funds discipline and has spent nearly 20
years testing, developing and refining a distinctive
approach to the management of these funds. The
launch of Fidelity MultiManager SICAV was the latest
phase in this development.
Our Investment Strategies Group, headed by Richard
Skelt, is responsible for all of Fidelity's
MultiManager portfolios including both Fidelity-only
funds of funds and third party funds of funds.
Richard Skelt remains closely involved with the
Fidelity MultiManager portfolios overseeing
strategy, research, development, asset allocation
and positioning.
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Why should an investor buy
a Fidelity MultiManager fund rather than someone
else's fund of funds?
We believe that we have a competitive edge over
existing fund of funds products.
Experience:
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Proud heritage of delivering high-quality,
innovative investment products
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Nearly twenty years' of experience in
multi-fund portfolio construction
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Breadth and depth of industry knowledge in the
investment team
Performance:
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Focus on alpha¹ generation
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Delivering excess returns is part of the Fidelity
heritage
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Fidelity MultiManager is focused on achieving
returns with an appropriate level of risk rather
than risk mitigation
Research:
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Commitment to bottom-up research
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Fidelity MultiManager focuses on managers, not a
fund's underlying stocks
Resources:
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Breadth of alpha-generating inputs
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Well-equipped support functions ensure a total
focus on research and portfolio management
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Sales and marketing tools to support our business
partners
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What criteria are used to
select underlying funds?
Our research process is forward-looking, and all
funds are subject to a common research framework
that focuses on:
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Organisational strength
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Quality, commitment and accountability of
investment team
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Investment philosophy and process
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Ability to execute effectively
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Evidence of skill
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Fund "suitability" - from a risk and
diversification perspective.
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What is the average holding
period for an underlying fund?
We look to invest in superior managers over the long
term. We do not tactically invest in funds for the
short term and we do not target holding periods or
turnover. However, common reasons for changing a
fund holding are:
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We have better ideas elsewhere
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Something changes in the investment case, e.g.
departure of portfolio manager or organisational
change
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Total portfolio construction considerations
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Do Fidelity MultiManager
portfolios invest in other Fidelity funds?
We treat Fidelity in the same way as we do any other
fund management group.
We have no obligation to invest in Fidelity funds,
but at the same time feel that we should not exclude
Fidelity from our investment universe. We seek to
avoid putting constraints on our investment universe
as much as possible, as doing so simply makes our
job more difficult. We do have limits on the amount
that we can invest in any one fund and in any one
fund manager (as detailed in the prospectus) and
this applies to all holdings including Fidelity. We
have purposely established Fidelity MultiManager
with its own identity to ensure this level of
objectivity.
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How many underlying funds
are held in each Fidelity MultiManager portfolio?
Fidelity MultiManager funds that invest in a single
asset class will aim to hold around 6 funds.
Multi-asset class funds that invest in a number of
asset classes (for example, equities, bonds and
property) range from 6 to 30 holdings.
The underlying funds selected for Fidelity
MultiManager portfolios are the ones that, when
combined, we believe are best placed to achieve the
required return within certain risk constraints.
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Do the Fidelity
MultiManager portfolios pay an income?
Some Fidelity MultiManager portfolios pay an income
- please contact your Fidelity agent or financial
adviser for more information.
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What are the minimum
amounts accepted for lump-sum investments and
top-ups?
Standard minimums apply: US$2,500 (or currency
equivalent) for lump-sum investments and US$1,000
(or currency equivalent) for top-ups.
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¹Alpha measures the fund manager's ability
to deliver risk-adjusted returns above the
fund’s benchmark.
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