| Fund Company | Fidelity Investments Canada |
| Fund Type | Global Small / Mid Cap Equity |
| Rating | B |
| Style | Mid Cap Value |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Daniel Dupont since October 2011
Joel Tillinghast since January 2012 |
| MER | 2.40% |
| Code | FID 253 – Front End Units
FID 553 – DSC Units |
| Minimum Investment | $500 |
Analysis: The management team of Daniel Dupont and Joel Tillinghast have been at the helm of this go anywhere, all cap global equity fund since early 2012. They struggled a bit out of the gate, but have been on a tear ever since, handily outpacing both the index and its peer group. Equally impressive is that volatility has been lower than the index and peer group and the downside protection has been very strong, participating in less than half of the market declines over the past three years.
The managers will have informal as well as formal monthly meetings where they discuss the relative attractiveness of investment opportunities in various regions around the world. Apart from that, they work largely independent of each other, with each using their unique, bottom up, value focused approaches to security selection.
Daniel Dupont uses a more concentrated approach that focuses the portfolio in 20 to 50 companies with sustainable business models that can deliver high return on capital over the long term. To be considered, it must be trading at a significant discount to its true value. In comparison, Fidelity veteran Tillinghast uses a value focused approach that focuses on companies that are growing faster than their peers, have little or no debt, excellent management teams, and have the ability to deliver consistent earnings and stable revenue. One interesting quirk to his approach is he will only buy stocks that are trading under $35 a share and appear undervalued relative to its peers.
The end portfolio is well diversified, holding more than 400 names. The top ten make up around 20% of the fund. Neither manager is afraid to hold cash when no opportunities are available. At the end of October, 16% of the fund was in cash, 31% in U.S. equities with the rest in Europe and Asia.
This is not a fund that will shoot the lights out when markets are rallying. But it should hold its own when markets get rocky. The result is that over the long term, you can be expected to earn an above average rate of return, at a below average level of volatility. If you have an above average risk tolerance, you could use this as a core global equity holding, but if not, it can be a good complement to an otherwise well diversified portfolio.