In a single stroke expansion of its Australian operations, Fidelity Investments has launched 10 new investment funds at once, including single country funds, regional funds, and sector specific funds.
The country specific funds introduced by Fidelity cover the American, Japanese, Indian, and Chinese markets. Regionally, Fidelity now offers funds encompassing Europe and Asia. Sectors targeted include global properties securities and hedge funds.
The launch of the funds come a year after Fidelity lost close to $2 billion dollars in mandates to its international equities funds from Perpetual Investments, after the later decided to set up its own in-house international funds operation in Dublin.
Fidelity’s 10 new funds will be offered in addition to its current local and global equities funds.
At the launch of the funds, the US-based manager said it was looking to take advantage of the growing need for Australian investors to look to overseas markets for more attractive investment opportunities.
“We represent less than 2 per cent of the world’s investment markets, and yet most investors hold about 40 per cent of their portfolios in Australian equities. Conversely, in global equities, they hold an average of about 17 per cent, yet it’s 98 per cent of the market. So Australian investors will need to look more and more to global markets, and that is where Fidelity’s advantage comes in being able to offer these products,” Fidelity Investments Australia managing director Michael Ohlsson said.
He said he did not expect the funds to pull in large amounts of money immediately.
“We see part of our responsibility is to look past today and see what investors will be doing in one, three, five, 10 and 20 years time. So we understand some of these [funds] will not get massive traction from day one, but we’re going to have funds that will have track records for when people are ready and comfortable to make that investment choice,” Ohlsson explained.
Fidelity’s in-house investment team, who will have a mid-cap focus and be predominantly unconstrained by the benchmark, will manage all of the new Fidelity seeded funds. The specific country management teams will be based where the assets are invested, and will draw support from the firm’s international regional teams.
The India fund is the only one of its kind in the market, and will look to take advantage of the strong and consistent growth experienced by the Indian economy.
The China fund is one of only a few offerings allowing direct investment opportunities into the country. It will look to gain from supply shortages in China as well as its strong growth in domestic consumption.
Fidelity intends to make the portfolios available to retail investors through their financial advisers.
