Fund Rationale: Fidelity Global Technology Fund

Fidelity Global Technology Fund (the “Fund”)
SGD Class A Accumulation Shares (ISIN: LU1823568750)
Fund Manager Page
Daily Price & Charts

Endowus has selected the Fund as it offers:

  • Contrarian technology portfolio allocating about 50% to stocks that have less growth and/or momentum characteristics and with long-term fundamental catalysts;
  • Balanced allocation to companies with three different characteristics (Growth, Cyclical, and Special Situations) to obtain exposure to various opportunities in multiple market cycles;
  • SFDR Rating of Article 8, driven by a commitment to invest at least half of the portfolio into sustainable securities;
  • Globally-established PM team with an experienced PM playing on contrarian stock-picking; and
  • Retail share class with 100% trailer fee rebated back to Endowus investors to achieve lower cost of access.

-----------------------------------

Key Information

Fund Objective: Aims to provide investors with long-term capital growth, principally through investment in the equity securities of companies throughout the world that have, or will, develop products, processes or services that will provide, or will benefit significantly from, technological advances and improvements 

Suitability: Investors who seek a fund that aims to provide investors with long-term growth, wish to participate in equity markets while being prepared to accept the risks associated with the Fund, and seek medium or long-term investment.

Cost:
Fidelity_Global_Technology_Fund_Cost_Retail_100__Rebate.png

  1. Total Fund-level Fees include fund management fee of 1.50%.
  2. This is a retail share class with 100% trailer fee rebated back to Endowus investors to lower the cost of access.
  3. Endowus does not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 13 June 2018
Share Class Inception: 1 September 1999
Benchmark: MSCI ACWI/Information Technology

Fund AUM: SGD 21.0bn
Source: MorningStar as of 23 July 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:

Fidelity_Global_Technology_Fund_Region.png

Sector Allocation:

Fidelity_Global_Technology_Fund_Sector.png
Source: MorningStar as of 31 May 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown. 

Selection Criteria

Endowus has selected the Fidelity Global Technology Fund for its unique, contrarian stock picking approaches in constructing a portfolio that has a relatively low correlation to other technology peers and has successfully delivered superior risk-adjusted returns in the long term. With this approach, it provides a differentiated and diversification benefit compared to other technology funds.

With an investment process that shines a spotlight on not only high-growth names, which is a common theme among peers in the technology space, the team considers a broad category of companies for investment with no factor bias — Growth, Cyclical, and Special Situations. Growth players would be positioned to benefit from innovation and long-term structural growth, Cyclicals will consist of shorter-term opportunistic positions, and Special Situations will usually leverage on mispricing opportunities. Ultimately, although investment decisions are made based on bottom-up research and fundamental conviction of each company, the portfolio can be reasonably expected to hold half the positions in Growth, and the remaining half in Cyclical and Special Situations. 

The resulting portfolio is a diverse basket of 50 to 100 technology companies across sectors including IT, communication services, and consumer discretionary (e.g. e-commerce companies), with a majority of the portfolio invested in the US, but also with good exposures to markets such as Korea, Germany, and the UK which are not commonly found in other technology funds. While the strategy’s benchmark is MSCI AC World Information Technology, investors should take note that the benchmark should be used for a simple performance comparison, as the portfolio allocation is, in fact, benchmark-agnostic. 

Additionally, we like the strategy’s commitment to invest at least half of its portfolio in sustainable securities, as defined using Fidelity’s proprietary sustainability rating. ESG considerations are integrated into the fundamental analysis of each security as part of their material non-financial risk assessments, and investment analysts work closely with dedicated sustainability analysts to uncover factors that are more specific to the technology sector. With this approach, the Fund has earned an SFDR Rating of Article 8. 

The Fund is led by Portfolio Manager Hyun Ho Sohn, whose contrarian stock-picking approach has defined the Fund’s unique identity today, as well as its positioning as a “different” technology portfolio in the space. The PM sits within Fidelity’s Global Equity desk, and is supported by more than 230 research professionals across various geographies and sectors; although the PM will work most closely with the 20 TMT analysts, he also benefits from the continued interactions and idea-sharing with analysts and PMs from other specialisations, as the technology sector continues to diffuse into other industries. However, investors may wish to note the key man risk associated with the current PM being the one that has mainly led the growth of the Fund, and is the primary decision-maker. 

With its inception date spanning back to 1999, the Fund possesses one of the oldest track records in the technology space, and has proven to deliver superior risk-adjusted returns over the long term compared to its benchmark and peers. However, investors should note that, due to its contrarian nature, the strategy may display weaker performance and higher volatility during times when growth and momentum stocks perform well. Given this characteristic, we think the Fund will make a good complement to a technology portfolio, and should be used as a satellite position in addition to your Core allocations.

-----------------------------------

Updated by Endowus: July 2021

** Disclaimer: Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.
The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.