By Kira Nickerson Fidelity is offering a discount on its recently launched four global sector funds...
By Kira Nickerson
Fidelity is offering a discount on its recently launched four global sector funds, investing in healthcare, financial, industrial and consumer companies.
The initial charge on the funds, which are domiciled in Luxembourg and part of the Fidelity Funds range, will be 3% for lump sum investments both inside and outside an Isa until 31 October with a fixed offer price of 25p per share until 2 October. The funds all have a sterling share class and are available for Isa investments, which will feature 3% IFA commission. Fidelity has adopted a lead manager approach to the funds, with one manager co-ordinating portfolio construction and co-managers covering stock selection in the US, Japan, South East Asia and Europe.
The financial fund, which is lead by Agus Tandiono, is managed by a team of four and supported by a team of 25 analysts. Benchmarked against the FTSE Global Financials index, the fund invests in banks, life assurance, insurance, real estate, brokerages and investment management.
The drivers for the sector that Tandiono hopes to leverage include the demographic change and growing savings culture as well as the themes of consolidation and globalisation. The initial geographic split of the fund is 43.6% in North America, 24.2% in Europe, 15.3% in the UK, 5.3% in Japan, 5.8% in Pacific and 0.6% in Latin America.
As compared to the fund's benchmark, Tandiono is overweight UK and Pacific and marginally underweight North America. His positions in Japan and Europe are more than 3% underweight as compared to the benchmark. The healthcare fund, led by Mark Buffet with a team of three plus five additional analysts, will look to invest in 85% healthcare including pharmaceuticals and 5% in biotechnology companies with the remainder in medical devices and healthcare service providers.
Buffet said: "The main driver is demographics. Those over the age of 55 are the biggest buyers of pharmaceuticals. There is strong correlation between sales growth and ageing population, which is set to accelerate."
Consolidation will also be a theme he will play, as the high cost of drug production may lead many medium-size groups to merge in order to compete. The fund will hold between 40-50 stocks with the top 10 alone making up 50% of the portfolio.
The industrials fund, lead by Mark Hodges, with five co-managers and 56 analysts, will invest in companies involved in research development, manufacture, distribution, supply or sale of materials, equipment, products or services related to cyclical and natural resource industries.
Co-manager Dale Nicholls said: "We will look a lot at technology in order to see if it will compete or even replace some of the areas in which we invest, for example oil and gas is likely someday to be replaced by fuel cells."
The fund will hold between 90 and 130 stocks with 40% of the portfolio in the top 10 holdings and will have a bias towards large and mid cap stocks.
The consumer goods sector fund, run by Marco Bianconi, with a team of four and supported by 66 analysts, invests primarily in companies, which are involved in the manufacture and distribution of goods to consumers. Sub-sectors for the fund include packaging, general retailers, support services, food and drug retailers, restaurants, pubs, tobacco, media and photography and leisure and entertainment.
Possible investments for the portfolio will include Walt Disney and Christian Dior, although the biggest portion of the fund will be invested in general retails and media and photography, which make up a combined 35.3% of the fund's benchmark.
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