With the Australian Securities Exchange (ASX)200 breaking through 6,000 points, investors are enjoying the buoyancy in markets which is a result of the most benign global growth environment since the Global Financial Crisis (GFC), according to Fidelity Australian Opportunities Fund.
“We are witnessing the first period of synchronised global growth in a decade,” the fund’s portfolio manager, Kate Howitt, said.
She noted that following the GFC, the ASX200 more than halved in value from its 2007 highs and that it was “a long, slow recovery back to 6000”, a barrier which was broken on Tuesday.
“However, it’s important to remember that this goldilocks scenario where markets continue to grow supported by loose monetary policy cannot last forever,” she said.
“Either growth will roll over or central banks will take the punchbowl away by normalising monetary policy.
“In that environment, investors will increasingly need to identify those stocks that offer structural growth even in a more challenging environment.”
According to FE Analytics’ data, the Fidelity Australian Opportunities Fund, which has $77.17 million in funds under management, delivered annualised performance as of October 31 of 13.41 per cent for the past five years and 11.67 per cent and 19.72 per cent for three years and one year, respectively.
The fund’s objective is to achieve returns (before fees, costs and taxes) that exceeds the S&P/ASX 200 Accumulation Index over a period of five to seven years.