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Product Focus |
14th January 2010 |
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Fidelity Real Assets Fund |
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Fidelity has launched a feeder into their innovative Global Real Assets Securities Fund. This fund is a great play on two major global themes : - Global inflationary pressures due to quantitative easing and their consequent impact on asset prices, and - Urbanisation and industrialisation of emerging economies Most investment gurus are of the opinion that real assets like commodities, precious metals and real estate will be the favoured asset classes of the future - if that's a view that you believe in, this is a fund worth considering for your clients' portfolios. |
How is it a first-of-its kind? |
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Speaking about the launch of the new fund, Ashu Suyash, Managing Director and Country Head - India, Fidelity International, said, "Indian investors have always had a soft spot for physical assets, like gold and real estate. The Fidelity Global Real Assets Fund brings you the option of adding a whole range of physical or real assets through the convenience and affordability of a diversified equity fund. At a retail level, we believe, that it is a unique, first-of-its-kind fund that offers an alternate asset play with all the liquidity benefits of a mutual fund." |
Ashu Suyash, MD, Fidelity International |
What is the investment opportunity? |
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Commenting on the fund, Mr. Lodha said, "I believe that the Fidelity Funds - Global Real Asset Securities Fund provides investors with the opportunity to benefit from a new type of investment approach from Fidelity International by combining thematic thinking and bottom-up stock idea identification. The allocation to thematic drivers will be dynamic and anticipate and exploit different points in the economic cycle - not just when there is a commodities/resources bull market. "To support this approach I can draw on the global reach of more than 100 investment analysts around the world - based in local markets. The breadth and depth of this research enables me to choose from companies, irrespective of the domicile of their listing, that are best positioned to gain from the urbanisation and industrialisation of the emerging economies. Combined with this long term thematic, the fund is also well positioned for the threat of returning inflation given the ramifications of the scale of global quantitative easing. The quest would be to find companies that can maintain pricing power in that environment. The wide opportunity set of the Fidelity Funds - Global Real Asset Securities Fund, containing as it does both areas of the market that are positively and negatively co-related to underlying commodity prices, gives investors access to the long-term drivers of the emerging economies but without having to rely on their own timing skills to enter specific sectors." |
Amit Lodha, Fund Manager, Fidelity Global Real Assets Securities Fund |
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* A First-of-its-kind opportunity to benefit from owning commodities, real estate, and more in one fund * Feeder Fund into to the Fidelity Funds -Global Real Asset Securities Fund * FF -Global Real Asset Securities Fund invests in stocks underpinned by real assets in the following areas: o Energy (Oil, Natural Gas, Uranium, Coal, Solar etc.) o Materials (Gold, Platinum, Steel, Chemicals, Agriculture, Aluminium, Copper etc.) o Industrials (Infrastructure -aerospace, construction, rail, cement, roads, defence, ports, ship building etc.) o Real Estate o Utilities (Electricity, Power, Water) * Benchmarked to a customised blend of the following five indices:
* A portfolio of 40 -60 best ideas * Sector allocation will be dynamic and unconstrained -stock positions +/-10% of benchmark * No market cap / style bias
The fund has started off on a strong wicket - beating its benchmark as well as delivering a higher return than the Sensex - a rare feat indeed for a global fund to outperform the Indian markets !
True to label, the fund is well diversified across its key focus sectors as shown below (Nov 09 data)
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