IMPORTANT INFORMATION
Overview
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Process
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Allocation
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Differentiator
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Track record
FOR PROFESSIONAL INVESTORS ONLY
Fidelity’s Multi Asset Allocator range is designed for investors who want low-cost, diversified exposure to global markets.
In this Range in Five, lead portfolio manager Chris Forgan breaks down the five funds that sit within it, their investment process and what makes them different to their peers.
Presenting Fidelity’s Multi Asset Allocator range
Five funds sit in the Fidelity Multi Asset Allocator range each designed to suit different client risk profiles: Fidelity Multi Asset Allocator Defensive, Fidelity Multi Asset Allocator Strategic, Fidelity Multi Asset Allocator Growth, Fidelity Multi Asset Allocator Adventurous and Fidelity Allocator World.
* Excluding formal firm-wide and fund-level exclusions
By investing in passive instruments, the ongoing charge (OCF) on each of the funds is kept to just 0.20% OCF*.
They are truly global in nature and provide diversified exposure to a broad range of asset classes from different providers.
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*The ongoing charges figures for all funds are estimated and actual expenses may be higher in the future. This figure may also vary from year to year.
Exposure to markets is implemented using low-cost index trackers and exchange traded funds (ETFs).
Embedded within this is a rigorous selection approach which Chris Forgan said focuses on identifying the optimal passive instruments selected from across the whole of market.
On average each of the five funds hold 8-14 holdings at any particular point in time.
“It’s a three-step process which begins with our capital market assumptions (CMAs), which we then blend together to deliver a maximum rate of return,” he said. “Finally, we focus on what instruments to use to gain exposure and to do this we take an open-architecture approach to identify what we think are the most efficient instruments to use.”
The funds are all rebalanced monthly to their long-term strategic asset allocation (SAA) framework. This provides consistent exposure to asset classes to help deliver against the investment outcomes.
To gain access to markets, each of the five funds invest in two distinct asset types: growth and defensive assets.
By blending asset classes, they aim to achieve better risk outcomes.
The growth assets – which aim to deliver capital growth and generate long-term returns – consist of global developed market equities, global smaller companies, global emerging market equities and global Real Estate Investment Trusts (REITS).
The defensive assets – which aim to protect the fund during risk-off periods, with typically low or negative correlation to growth assets – consist of global government bonds and global corporate bonds.
“It’s fair to say that over recent years the world has become more economically and geographically diverse,” Forgan said. “By investing in these six asset classes, which are spread across a set of countries and sectors, we aim to capture these opportunities within the Allocator funds.”
“The global nature of our SAA and the funds’ open-architecture approach are two of their key differentiators versus our peers,” said Forgan.
The Multi Asset Allocator fund range is one of four multi asset offerings from Fidelity; the others being the Fidelity Multi Asset Open fund range, the Fidelity Sustainable Multi Asset fund range, and the Fidelity Multi Asset Income fund range.
Of the four fund ranges, the Allocator funds are the cheapest in terms of OCF due to their use of passive instruments and Forgan added they are also the simplest, with the sole focus being to deliver the market rate of return.
In terms of the team, Forgan has been involved in managing the Allocator range since inception, joining Fidelity in 2017 from Henderson Global Investors.
He is assisted by co-manager Sarah-Jane Cawthray, who joined Fidelity in 2017 from Merrill Lynch Investment Managers.
Between them, the two managers have combined investment experience of over 40 years.
Repurposed at the end of March 2018, Forgan said performance has been strong both on an absolute and relative basis.
“The US market has been a key contributor to that performance, as has the global nature of our assets overall,” Forgan said.
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“We have also seen the benefits of diversification come to the fore and drive performance, particularly around periods of market turmoil such as Covid,” he added.
Since launch the five funds have accumulated assets under management in excess of £2bn.
Multi Asset Allocator range: 12-month rolling performance
Past performance is not a reliable indicator of future results. Totals are subject to rounding. Source: Fidelity International, 29 February 2024. Basis mid-mid with net income reinvested in GBP. Performance shown for the W Acc Share Class.
