FidelityConnects

As the vaccines continue to be rolled out, Denise Chisholm looks at what this means for sector and factor investing throughout the U.S. in 2021. Denise analyzes what typically happens after a recession, as well as historical trends for equity market dislocation and credit spreads being at the tightest levels since the 1980s. There is debate currently if we are actually in early cycle with some portfolio managers believing we are in a classic early cycle, but others do not. Consumer discretionary has played out, which is a sign of an early cycle, but there is no playbook unless you start to aggregate everything together into a sector or factor.

Recorded on January 21, 2021.

Fidelity’s experts look at the inauguration of Joe Biden as the 46th president of the United States, what to expect, and the potential policy and investment implications. Greg Lowman, VP, digital advocacy and policy communications, and David Tulk, portfolio manager, reflect on how President Biden’s government faces difficulty in uniting a divided government and country. They also look at key policies and stimulus that will be put in place, and the ripple effects this change will have on Canada and markets around the globe.

Recorded on January 20, 2021.

Jurrien Timmer, Director of Global Macro, notes that, from a markets perspective, the week leading into the inauguration was quiet. The global financial crisis stimulus acted as a tailwind for Barack Obama’s presidency, and Jurrien believes Biden will see a similar tailwind from the COVID-19 stimulus. President Joe Biden has a 1.9 trillion-dollar stimulus plan that should pass because of the “blue wave.” A weakening U.S. dollar makes sense, given all the fiscal and monetary stimulus we’ve seen, and neither Yellen nor Jerome Powell at the Federal Reserve (the Fed) is afraid to push some buttons to get things done. Jurrien believes policy will remain very accommodative and that the Fed will not raise rates or taper off its asset purchases.

Recorded January 18, 2021.

Alex Gold, portfolio manager for Fidelity Global Health Care Fund, and Dr. Judith Finegold, portfolio co-manager, discuss vaccine distribution, their fund positioning, and what the Biden administration means for healthcare and investors. Alex and Judith are concerned about developing countries not receiving doses in the foreseeable future. They are also keeping an eye on the new COVID variant. As the Biden administration comes into power, there are going to be more potential changes to the healthcare system.  They say even after the vaccine rollout, there may be spikes of the virus every few months or years. They say many evaluations for the healthcare market are very cold. As the vaccine rolls out, certain healthcare industries should return back to normal. 

Recorded January 19, 2021.

Institutional portfolio manager Naveed Rahman shares his outlook for 2021 on investing in global small caps and describes the fund positioning for Fidelity Global Intrinsic Value Class. Naveed believes value will make a comeback. The market moves in cycles, and things that worked before might not work in the future – and, he notes, we have never seen fiscal and monetary stimulus working together in any previous market correction the way they have been during the past few months. Naveed and Joel Tillinghast, with whom he manages the Class, have some concerns about tech: valuations are elevated, and the consensus forecast for earnings in the sector is slowing. The prospect of higher regulations and higher taxes for tech companies over the next five years is not reflected in the sector’s current valuations.

Recorded January 15, 2021.

Portfolio manager Dan Kelley’s mandate is to invest in founder-led companies because founders aren’t afraid to think outside of the box, are innovative in how they do business and are focused on a unique long-term vision. An entrepreneurial spirit, commitment to the business, focus on innovation, and long-term incentive alignment with shareholders are common qualities of corporate founders that may lead to a company’s success. Dan shares how Fidelity Founders Class came to be as an internal pilot 5 years ago, with Fidelity portfolio managers and quantitative analysts looking at the growth trends of founder-led companies. Dan defines what a founder-led company means to him, and how he is a “growth at a reasonable price investor, with a focus on mispriced growth”.

Recorded on January 13, 2021.

Jed Weiss, long-serving portfolio manager of Fidelity International Growth Fund, reflects on how the market dislocations in 2020 presented investment opportunities. Jed targets companies with multiyear structural growth prospects, high barriers to entry and attractive valuations, based on his earnings forecasts. In today’s podcast he comments on trends he is currently seeing, his fund’s top holdings, and his sell discipline. Given that Jed runs an international fund, he explains how he utilizes worldwide Fidelity research analysts for local analysis, and navigating regional regulatory initiatives.

Recorded on January 13, 2021.

Andrew Clee, Vice President, Product, and Dave Bushnell, Senior Vice President, Advisor National Sales, explore the investment product landscape in 2021 and beyond, including ETFs, liquid alts and other innovations. Andrew believes 2020 was the comeback of active management, and investors in passive products did not see the magnitude of returns seen in active ones. Looking forward, he believes that so long as there’s volatility, there’s opportunity for all investment styles. Low volatility mandates have been in Canada for 11 years and 2020 was the first year we saw net outflows; many outperformed in March but lagged on the rebound. Instead, money flowed into high quality and value mandates. Another major change Andrew notes in the ETF space is the shift from passive to active fixed income exposure.

Recorded on January 14. 2021.

Portfolio Manager David Way discusses his thoughts on inflation, current themes in the market, and how he’s finding opportunities for alpha on both the long and short side of the fund. In terms of inflation, David is looking at interest rates and inflation in two parts: the real economy and the financial economy. The reality is that interest rates and credit spreads are really low.  David says the Fidelity Long/Short Alternative Fund is for those investors who are optimistic about the future.  We can’t necessarily time the market he says, but we can acknowledge that in today’s market, there are many pockets of excess - and that’s exactly what he’s trying to take advantage of. In this fund, David is able to fully invest in his long ideas.  The structure of the fund allows him to own 130% of assets in long stocks.  The fund also allows him to overcome the fear of losing money over things we can’t control as investors.

Recorded on January 12, 2021.

Jurrien Timmer joins us again to explore what is influencing market expectations and reactions this week, as well as what key indicators he is watching in the first half of 2021. The trend has been large cap growth for a long time, but Jurrien sees opportunity for small caps and emerging markets in 2021. Jurrien explains what is causing the recent moves in bitcoin, gold, and the US dollar. Jurrien also looks at the Bloomberg Daily Activity Indicator throughout 2020, inflation, and liquidity. Follow along with Jurrien’s charts on Twitter: @TimmerFidelity

Recorded on January 11, 2021.