Fidelity's 3 Funds Run by Top Stock Pickers

Fidelity multi-asset investor Nick Peters tells Emma Wall we are entering a stock pickers market - and chooses three funds run by managers who fit the bill

Emma Wall 13 September, 2017 | 9:36AM
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Emma Wall: Hello and welcome to Morningstar. I'm Emma Wall, and here today to give his three Fund picks is Fidelity Multi-asset fund manager Nick Peters. Hello Nick.

Nick Peters: Hi.

Wall: So, before you give your three fund picks, I know you wanted to say something about why you've chosen these three in terms of your conviction across asset classes.

Peters: Yeah absolutely. So, I do think now when we were in a low growth environment, I think stock picking is key, so I have picked three active managers with different styles but they are all stock pickers. They've had mixed fortunes over the last 12 months, so there's a good mix.

Wall: And what's the first you'd like to highlight then?

Peters: So, the first one is the BlackRock Continental European Equity Fund, and that's definitely had mixed fortunes, and actually they've changed the manager half way through this year. But the team as a whole is a very strong team and the long-term track record is good. They looked for earnings momentum, but backed that up with strong franchises.

They've struggled recently, because of what we're seeing is a strong run in value stocks and they've struggled there, but generally I think the performance will come back and they are fundamentally good stock pickers.

Wall: What's the second fund today?

Peters: So, Japan – I've looked at Japan, so PineBridge Japanese Smaller Companies, so whereas BlackRock have got a large team to choose stocks, PineBridge is a two-lady team and Katsumi San is the fund manager and she has been running the fund since mid-90s. Fantastic track record.

This year has been a really good year as well. So, this is more for momentum perspective I suppose. Picked stocks produce strong earnings growth. Again franchises, she is less worried about valuations as long as companies produce earnings, she will stick with them. So, turnover is low, and as I say, it's a very good track record.

Wall: And does she hedge the currency on that? Because in the past, currency has played a real part in returns for Japanese equities, isn't it?

Peters: Yes. So, I don't think she does. Basically, I think that the mindset of the team is that the currency returns are part of the returns that you get from investing in equities, so there is for the investors to decide whether they should hedge the currency or not.

Wall: And what's the third and final fund?

Peters: The third one is Fidelity American Special Sits. Angel Agudo, who has been running the fund for nearly four years now, again has gone through a mixed patch recently, primarily because as a value manager, he is not been invested in the tech stocks that have done so well, but his stock picking skills are extremely strong and he picks stocks that are out of favour, looks at the upside potential, downside and then invests when he thinks the chances are the stock is going to do well rather than poorly.

He struggled because of technology, but currently he's over weight financials, under weight consumers, so I think sensibly positioned and his track record speaks for himself.

Wall: Nick. Thank you very much.

Peters: Thank you.

Wall: This is Emma Wall for Morningstar. Thank you for watching.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
BlackRock Continental Euro D Acc5,252.15 GBP-0.64Rating
Fidelity American Special Sits W Acc2,566.07 GBP0.51Rating
PineBridge Japan Small Cap Equity Y77.27 USD0.16Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar

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