FPP: a funds management philosophy

Yasmine Raso

Senior Journalist, Financial Newswire

23 September 2022

Focus, prudence and patience are the keys behind Fidelity International’s Global Emerging Markets Fund and to its win in the Emerging Markets Equities category at Financial Newswire’s 2022 Fund Manager of the Year Awards.

Portfolio Manager, Amit Goel, has told Financial Newswire the three-pronged approach to investing is what kept the fund afloat during a challenging and intense period experienced across the market.

“We see to it that our return is not coming from a few outliers generating very strong returns, but it is driven by a more diversified set of companies in the core of our portfolio performing well,” he said.

“We believe what differentiates us is the strength and experience of our investment team and our research and ESG platforms, as well as our well-established and proven investment process that we have developed over time.

“It is all about understanding our current and potential investments in greater depth and remaining focused on a consistent strategy which we strive to practice all the time.”

Goel also credits the investment philosophy as the driver of the portfolio’s consistency in quality and growth bias, at low volatility and with a top environmental, social and governance (ESG) profile.

“We build a ‘Focused’ 30 to 50 stock portfolio of high-quality companies operating in areas that offer structural reinvestment opportunities or improving industry structures,” Goel said.

“These are companies with strong moats due to their technology, cost or scale leadership that offer superior returns on invested capital and can be sustained over time based on the reinvestment opportunity they are presented with.

“We are ‘Prudent’, as we try to avoid permanent loss of capital by investing in companies with strong corporate governance and sustainability practices. We also look for robust balance sheets that can support the business in times of economic stress.

“We are also prudent in the price we pay for the quality and growth businesses we invest in, hence avoiding fashionable high-growth, high-valuation companies.

“We are also ‘Patient’ in our approach and take a three-to-five-year investment horizon enabling the portfolio to benefit from the power of compounding over the longer term.”

With the winning Global Emerging Markets Fund part of its arsenal, Fidelity International enjoys an edge in funds management. With global reach, international hubs and on-the-ground analyst teams, the firm hones in on regions and concentrates on companies of interest.

“Having analysts close to the companies we invest in has always been a huge advantage and more so in the last couple of years when international travel came to a halt,” Goel said.

“We have been continuously engaging with our companies even during the COVID period and analysts have been adding value with their local knowledge.

“This is key because as investors we make money in the equity markets only by understanding our investee companies better than others and with that having a differentiated view versus the consensus view.”