As the global economy enters a new regime of normalising interest rates, inflation growth, emerging populism and redrawn trade relations, effectiveness in the conventional usage of equity beta is diminishing.
Domestic-focused US companies are currently better positioned to capitalise on local growth and insulated from protectionist risks, with Europe facing further exits and China transitioning into a consumption-driven economy.
It is increasingly insufficient to rely solely on the net benefits of beta investing due to the potentially offsetting effects caused by growing divergences the sector, country and region levels. Even chief investment officers of leading private banks are growing wary of making convicted granular calls, preferring to outsource equity asset allocation to asset managers with best-in-breed bottom-up capabilities.
For the second consecutive year, Fidelity International has emerged as the industry’s choice to oversee its global equity allocations, with more than 60 equity funds available for private banks in Asia, ranging from single country, diversified regional and global sector to theme-based strategies.
Even more important is Fidelity’s bottom-up capabilities. The firm boasts 400 investment professionals and research staff globally, who attend more than 17,000 company meetings a year. Fidelity International has access to proprietary in-house research on 90% of fund holdings and its analysts commission around 250 bespoke surveys or reports per year to understand the market potential of companies’ product and service innovations, so as to seek future growth opportunities or income streams that markets have not priced for.
Gatekeepers in Asia have taken note of the intensity of Fidelity International’s bottom-up research capabilities, selecting it as this year’s Best Fund Provider – Global Equity.