FidelityConnects

Fidelity Emerging Markets Fund portfolio manager Sam Polyak discusses the types of businesses he is looking for in emerging markets and where he is finding areas of opportunity. Sam is known for his GARP (growth at a reasonable price) investment style and believes stocks follow earnings. It is stock selection that drives his process, which leads to a portfolio that he keeps to around 50 holdings. Sam has strict investment “guardrails” in place for the Fund (country-, sector- and stock-specific) to increase diversification and boost strong risk-adjusted returns. Sam notes that Fidelity has the advantage of a strong research team based in Hong Kong that is always on the ground meeting companies, suppliers, management and consumers, but what differentiates Fidelity most is a focus on corporate governance. Fidelity’s corporate governance team, based in Bangalore, completes analysis of all potential investments, performing background checks and making deep dives to avoid possible pitfalls.

Recorded on June 18, 2020.

Jurrien Timmer, Director of Global Macro, provides his weekly market commentary and global macro insights. Jurrien’s research on bear market rallies has shown that the only time we saw a bear market rally facing the same strength and breadth as today was in 1929–1932, which he also found surprising, because bear markets don’t usually produce much breadth. Jurrien believes that companies that can deliver stable growth in dividends, not just payouts, will be rewarded by an older investor demographic that is seeking income but unable to find it in the bond market, except in corporate bonds. The U.S. dollar has come down: Jurrien believes this could be a great opportunity, because it makes the rest of the world more attractive. A weaker dollar favours emerging markets, a value tilt, commodities and gold.

Recorded on June 22, 2020.

Portfolio manager Steve MacMillan shares his latest insights on how he is judging earnings visibility with so much market uncertainty. Overall, Steve sees opportunity in staying invested in defensive stocks, both large cap and small cap, throughout this year. For Canadian investors, Steve manages Fidelity Small Cap America Fund, as the name suggests it is a small- and mid-capitalization oriented fund. Steve also manages Fidelity American Equity Fund, a unique approach to the US mid- and large-cap market. American Equity Fund offers more defensive positioning with exposure to non-cyclical industries, and less exposure to high valuation tech names. Steve speaks to preserving capital through past market drawdowns, his sell discipline, and looks at current holdings in his top ten.

Recorded on June 17, 2020.

Fixed income portfolio managers Jeff Moore and Michael Plage discuss what gives Fidelity an advantage, and how they're positioning their funds to capitalize on the tremendous opportunities lately, especially in the investment grade sector. Jeff and Michael explain where they are going for yield, now that government bond yields around the world are near zero and likely to remain there for the long term, and there are trillions of dollars sitting on the sidelines in money market earning nothing. Also, as we’ve seen a trillion dollars of supply in the investment grade corporate bond market, Jeff and Michael look at the opportunities the recent market volatility presented them with.

Recorded on June 17, 2020.

After seeing markets move toward a recovery, Denise Chisholm, sector strategist, discusses where things may go next and which areas to consider. Denise believes we can draw a few conclusions looking at historical market data: stocks can bottom early in short and sharp recessions; recovery may be conditional on the stimulus received; and it is important to look at valuation spreads and defensive indicators, which suggest a higher probability that we can discount a recession. Denise explains her process for assessing the current crisis, and reflects on how the current crisis compares to the other past crises. Denise also unpacks how central banks around the world have responded swiftly and decisively to the March market crash via unprecedented monetary and fiscal stimulus.

Recorded on June 17, 2020.

Steve DuFour has a growth at a reasonable price (GARP) investing style. Historically, he has spent his time looking at the income statements of reasonably priced companies to find earnings growing faster than the market. However, in this market cycle, he is going to the balance sheet first, and looking at how much cash and debt companies have. He focuses on their liquidity ratio, and has stringent screens he performs to arrive at a concentrated portfolio, Fidelity U.S. Focused Stock Fund. Steve shares how he’s reacting based on one of the most important earning seasons in coming years. And amidst a climate of disruption, he’ll share how being agile is working to his advantage.

Recorded on June 17, 2020.

Portfolio manager Patrice Quirion believes that there are some good opportunities for contrarian investors at this time, while many major economies are in the process of reopening following months of uncertainty. Patrice discusses his outlook for global equity markets, and shares which areas he is finding most exciting. He also looks at COVID-19’s potential impact on the future of business and how these factors could affect Canadian investors. Patrice sees this as a great opportunity to rotate from growth stocks – which he dubs the “market darlings” – to good-quality, long-term businesses that have taken a hit. For investors who can take a long-term view, Patrice believes, there could be once-in-a decade types of opportunities. He believes we should be positioning ourselves to buy good cyclical businesses; if the economy takes longer to recover, these companies are more likely to make it through, and they could offer a lot of upside potential.

Recorded on June 16, 2020.

Le gestionnaire de portefeuille Patrice Quirion estime qu’il y a de bonnes occasions à saisir pour les investisseurs à contre-courant en ce moment, et il donne son point de vue sur les secteurs qui lui semblent les plus prometteurs. Après plusieurs mois d’incertitude, de nombreux pays procèdent à la réouverture de leur économie. M. Quirion partage sa perspective des marchés boursiers mondiaux, discute de l’incidence éventuelle de la COVID-19 sur le monde des affaires et explique ce que cela signifie pour les investisseurs canadiens. Selon M. Quirion, la rotation des titres de croissance – qu’il appelle les « chouchous du marché » – vers les entreprises stables et de bonne qualité, mais malmenées, offre une excellente occasion. Pour les investisseurs qui peuvent adopter une perspective à long terme, M. Quirion juge que ce genre d’occasions pourrait ne pas se représenter avant 10 ans. L’achat de bonnes entreprises cycliques devrait être privilégié à son avis, puisque si l’économie prend du temps à se rétablir, ces entreprises ont plus de chances de passer au travers et elles pourraient offrir un potentiel de gains important.

Date : 16 juin 2020

In today’s podcast, Jurrien Timmer, Director of Global Macro, provides his weekly market commentary and global macro update. Follow Jurrien on LinkedIn, or @TimmerFidelity on Twitter for detailed Jurrien’s charts and graphs. Reflecting on the June 9 - 11 market pullback, Jurrien believes the correction was necessary and not something for investors to worry about, noting he believes the odds are in investors’ favour, and that throughout history the market has never recovered this much without being the start of a bull market.

Recorded on June 15, 2020.

Contrarian investor Hugo Lavallée shares his outlook on where he is finding opportunities that fit his mandate in reopening economies. Hugo has a foot in both value and growth stocks and can tilt either way. The course of the pandemic has played into his investment style: looking for good businesses that are facing what are likely to be temporary issues (difficult quarters or years). While bad events come and go, affecting volatility in the now, Hugo is focused on the later. His top holdings right now are companies selling small-ticket items, such as Five Below, Dollarama and Chipotle. Looking at ESG investing, Hugo’s main focus is on the “E” (environmental), but he notes that his peers at Fidelity do a great job looking at the “S” and “G” (social and governance). It’s also important to remember Fidelity has its own ESG ratings and doesn’t just follow the MSCI assessments.

Recorded on June 12, 2020.