FidelityConnects

Tom Stevenson, UK-based Investment Director at Fidelity International, provides deeper insights into what the global landscape might look like in the months ahead as investors ponder a potential market correction and volatility caused by the rise of the Delta variant around the globe. Tom says there are four phases in the market cycle: despair, hope, growth, and optimism, respectively. He believes we are currently in the growth phase as the global economy reopens and people go back to work. Tom discusses what’s happening in Europe, noting that big export markets like Germany are doing well and that the UK is highly advanced in the rollout of vaccines. He shares that investors should focus on inflation in the next couple of months as there are signs that rising inflation may come back. Tom also discusses sectors that are currently seeing positive gains noting that there is a bit of a rotation back to defensive stocks. Additionally, Tom believes that the most important thing for investors to do is focus on long-term goals and not be fazed by market fluctuations, which are volatile.

Recorded on July 21, 2021.

Many investors have been shaken up by rising concerns about the Covid-19 Delta Variant. Recently, these concerns have affected investors’ outlook on bonds. Fixed Income portfolio manager, Jeff Moore, joins us to share his unique perspective on the global fixed income markets, inflation, and monetary policies. Jeff manages the Fidelity Multi-Sector Bond Fund, Investment Grade Total Bond Fund, and several other income mandates. Jeff notes that over the long term, stocks go up, but you must be willing to take drawdowns. He says bonds play a role in the 60/40 portfolio as bonds are designed to go up in value when stocks go down. He highlights that bonds are meant for diversification. Jeff says that inflation is tough to get. He believes that financial markets should be concerned about inflation when the Fed has to raise rates. Jeff also shares his thoughts on the Chinese bond markets noting that China is growing slowly because of demographics, and as a result, he’s not overly excited.

Recorded on July 21, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript-podcast-moore-fixed-income-monthly-21jul2021.pdf

As markets adjust and we transition from the early cycle to the mid-cycle, all eyes are on the central bank's next move. Director of Global Macro, Jurrien Timmer, is back on the program to discuss the Fed's next likely move and share the latest data, with the help of historical analogs. Jurrien believes we are transitioning from the liquidity-driven phase of the bull market, and the rotation now has reversed back into growth and bonds. The Fed has signalled that interest rates could be raised in 2023. Before raising interest rates, the Fed must taper asset prices. Jurrien shares that the Fed may not want to have the conversation of the interest rates and tapering at the Jackson Hole meeting in August, noting that they may not want to spark any inflationary fears. Jurrien also adds that although growth is favourable, value and small caps may return if inflation ends up sticky because they are better inflation hedges. Follow along with Jurrien's charts on Twitter: @TimmerFidelity

Recorded on July 19, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript-podcast-timmer-global-macro-19jul2021.pdf

At the start of the pandemic, investors flocked to tech companies in huge numbers after recognizing the importance of innovation to business continuity. HyunHo Sohn, Portfolio Manager of Fidelity Technology Innovators Fund, dives into where tech is going as economies begin to reopen in the second half of 2021. HyunHo says both the fund and the tech sector overall work in both growth and value. The overall fund and the overall tech index reached a new high in the first quarter of this year during the rotation out of growth and into value. HyunHo notes technology innovators are somewhat Covid proof since tech companies have benefited from an increase in demand for goods and services.  He also discusses interesting opportunities in technology noting that he is focusing on semiconductor businesses.

Recorded on July 16, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript-podcast-sohn-tech-2nd-half-16jul2021.pdf

As economies reopen around the world, many investors are keeping an eye on rising inflation. Andrew Marchese, Chief Investment Officer and portfolio manager, shares his insights into the market's key themes as we progress into the second half of the year. For Canadian investors, Andrew manages Fidelity Canadian Disciplined Equity Fund, Fidelity Canadian Equity Private Pool, and Fidelity Concentrated Canadian Equity Private Pool. Andrew frames today’s discussion around three main themes investors should be aware of. The first theme he looks out for is speculation. We're dealing with an unprecedented amount of stimulus. Hence, as the cycle progresses and central banks reduce their stimulus, we'll have to keep an eye on how speculation in certain asset classes may decline. The second theme is inflation. Andrew shares many macroeconomic indicators that can continue to build inflation, noting that the amount of stimulus poses a headwind to inflation. For the third theme, he encourages investors to focus on the fundamentals of companies going forward. Additionally, Andrew shares his thoughts on housing and financials, and the sectors that might attract this stimulus and benefit from the expected environment.

Recorded on July 15, 2021.

In the 20th episode of the Fidelity ETF Exchange - powered by FidelityConnects, co-hosts Étienne Joncas Bouchard and Himesh Patel sit down to recap notable trends and headlines in the Canadian ETF Industry for the second quarter of 2021. With the first six months of the year behind us, the Canadian ETF industry has brought in a record $30B in net new assets (best first 6 months ever). Some of the key areas of focus for hosts Etienne & Himesh include the positive uptick in flows for Value and Dividend factor ETFs, the emergence of a new category in cryptocurrency ETFs as well as the sizeable gap between inflows to equity vs. fixed-income.

Recorded on July 14, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript_podcast_etf_exchange_ep20.pdf

Extreme weather events throughout the world are prompting governments to increase the urgency around combating climate change. We welcome institutional portfolio manager Mike Hagopian and senior portfolio manager Anna Lester from Geode Capital Management to discuss global sustainable investing. Mike and Anna are part of the team behind Fidelity Sustainable World ETF and discuss their positioning in the fund for the second half of this year. Geode’s strategy is to use the MSCI ACWI Index to build a portfolio that seeks to satisfy three main things: having an ESG advantage relative to this index, delivering returns that outpace the index, and delivering a similar risk profile to the index. Mike says energy and real estate are some sectors where there is more emphasis on that “E” pillar. Anna says real estate is about 40% of the global energy use, so more green buildings would significantly improve global emissions.

Recorded on July 14, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript_podcast_hagopian_next_for_sustainable_investing.pdf

In today’s episode, we are joined by Mike Hickey, institutional portfolio manager, to provide an update on Fidelity Insights Class. Mike works closely with Will Danoff, the renowned portfolio manager of Fidelity Insights Class in Canada, and Fidelity Contrafund in the United States. Mike shares that he and Will are growth investors looking for earnings and cash flow growth in the next three to five years. He believes stocks in tech and healthcare have high revenue growth, and they’re secular growers. COVID-19 has changed the behaviour of consumers, and Mike believes a resurgence should have little impact on Insights, while continuing to speed up digital adoption (e-payments, e-commerce) by consumers. Mike thinks that the landscape is looking increasingly more global. One of the benefits of Fidelity is that roughly 30% of analysts are outside the North American region. Therefore, they are looking at companies benefiting from the same trends in North America, primarily in the growth space. Mike also discusses ESG, noting that company executives are increasingly more focused on the “E” and “S”.

Recorded on July 13, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript_podcast_hickey_insights_class_07-13.pdf

Institutional portfolio manager Abhijeet Singh speaks with host Pamela Ritchie about the opportunities in emerging markets (EM) and discusses the trends shaping Fidelity Emerging Markets Fund. Data security issues and what is being shared with other countries have led to a tug of war between China and the U.S.. Abhijeet says valuations have become less expensive as this has happened. Abhijeet also points out that the U.S. dollar is an important component of emerging market assets and he believes over the long term the amount of stimulus and money printing could make the U.S. dollar weaker. He also shares where Emerging Markets Fund is currently overweight and underweight, noting that the fund has been overweight in Brazil and Mexico since things became expensive in the second half of last year. Going forward, the fund may start to revisit China as things get more affordable in terms of valuation.

Recorded on July 15, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript-podcast-singh-07-15-regions-in-focus.pdf

Jurrien Timmer, Director of Global Macro, is back on the program to discuss the narrative surrounding bubbles bursting and to walk us through the various indicators and variables he is paying attention to. Jurrien does not believe that we are experiencing a big market bubble, as bubbles have distinct characteristics. The Fed is succeeding in keeping interest rates low, as evidenced by the fact that the 10-year treasury yield is lower than normal. Jurrien would classify that if there is a bubble anywhere, it would be the bond market, where interest rates are repressed. Also, Jurrien discusses the impact of low-interest rates on GDP and whether it would lead to a generational debt crisis. He says the old saying is that everyone can be solvent if interest rates are low enough, noting that if rates are low, debts can be paid off. Follow along with Jurrien’s charts on Twitter: @TimmerFidelity.

Recorded on July 12, 2021.

Transcript (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript_podcast_timmer_global_macro_view_jul12.pdf