Fund Rationale: Fidelity Global Dividend Fund

Fidelity Global Dividend Fund (the “Fund”)
SGD Class A Monthly Distribution Shares (ISIN: LU0731783394) | Daily Price & Charts (SGD A)
SGD Class SR Accumulation Shares (ISIN: LU1380763851) | Daily Price & Charts (SGD SR)
USD Class Y Accumulation Shares (ISIN: LU0605515963) | Daily Price & Charts (USD)
AUD Hedged Class A Monthly Distribution Shares (ISIN: LU0982800491) | Daily Price & Charts (AUD)

Fund Manager Page

Endowus has selected the Fund as it offers:

  • A diverse portfolio of high-quality companies primarily from defensive sectors around the world that offers a sustainable dividend yield in the long-term with low beta characteristics compared to peers;
  • High-conviction investment approach of allocating only to companies with strong fundamentals, rather than employing a short-term mindset of investing in companies with high current dividend yield;
  • Track record of consistent top-tier returns since its inception in 2012, with stable dividend payouts;
  • Highly experienced PM supported by Fidelity’s Income team and over 160 equity analysts worldwide;
  • ESG integration and mandate to invest at least 50% of the portfolio in companies with sustainable characteristics (EU SFDR Article 8); and
  • Retail share class with 100% trailer fee rebated back to Endowus investors to achieve lower cost of access.

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Key Information

Fund Objective: Aims to achieve income and long-term capital growth principally through investments in income-producing equity securities globally.

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

Cost (SGD A, Cash/SRS; AUD):
Fidelity_Global_Dividend_Fund_Cost_Class_A_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 do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Cost (SGD SR, CPF):
Fidelity_Global_Dividend_Fund_Cost_Class_SR_Retail_100__Rebate.png

  1. Total Fund-level Fees include fund management fee of 1.30%.
  2. This is a retail share class with 100% trailer fee rebated back to Endowus investors to lower the cost of access.
  3. Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Cost (USD):
Fidelity_Global_Dividend_Fund_Cost_USD_Clean_0__Trailer.png

  1. Total Fund-level Fees include fund management fee of 1.30%.
  2. This is a clean share class that offers the lowest possible fees. There are no trailer fees for clean share classes.
  3. Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 30 January 2012 
Share Class Inception: 30 January 2012 (SGD Class A), 4 April 2016 (SGD Class SR), 30 January 2012 (USD Class Y), 28 October 2013 (AUD Class A)
Benchmark: MSCI All Country World Index

Fund AUM: SGD 15.1bn
Source: MorningStar as of 27 August 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:
Fidelity_Global_Dividend_Fund_Region.png

Sector Allocation:
Fidelity_Global_Dividend_Fund_Sector.png

Source: MorningStar as of 30 June 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 Dividend Fund for its high-conviction portfolio of high-quality companies that has historically demonstrated stable and sustainable dividend payouts. We like the Fund’s fundamental-focused investment process in choosing quality companies from anywhere in the world, and the resulting ability to protect investors through lower volatility during market downturns, while capturing good returns in rising markets.

The team, led by Dan Roberts with a lifelong career of more than 20 years as a dividend investor, is supported by Fidelity’s highly experienced Equity Income team, as well as more than 160 equity analysts located globally who provide a deep and wide coverage on the various stock ideas around the world. Companies are evaluated primarily through a quality lens, with scrutiny on their balance sheet, cash flow, and valuation, which the team believes are good indicators of future growth prospects of the companies, as well as the sustainability of their dividend payouts in the longer term. ESG factors are considered at this point as well, as the team believes that “sustainable companies produce sustainable dividends” — with an investment mandate to invest at least half of the portfolio in companies with sustainable characteristics. This is evaluated using Fidelity’s Proprietary Sustainable Rating (based on sector-specific KPIs across 99 different sub-sectors), which has enabled the Fund to achieve the SFDR Rating of Article 8.

This quality-based investment philosophy is what sets the Fund apart from its peers in dividend investing, where companies are mostly selected to maximise current dividend yield. This strategy has especially prevailed during the COVID-19 pandemic, when many peers suffered from dividend cuts from their investee companies -- this Fund, on the other hand, had in fact benefited from increased dividend payouts even during the market downturn.

In the end, the resulting portfolio is a basket of 40-60 companies which is well-diversified across the world with a structural underweight to the US (compared to peers). There is a consistent bias to quality and value factors, which is explained by the prevalence of defensive sectors such as financials, consumer staples, healthcare, and utilities throughout the Fund’s lifetime. Large cap companies are preferred, although there are occasional allocations to mid-sized companies based on the team’s bottom-up analysis.

The Fund has demonstrated top-tier returns with low volatility and down-capture compared to peers since its inception in 2012, although investors should keep in mind that relatively low returns are expected in market conditions where quality underperforms, or growth/momentum companies rally. Regardless, we like the Fund’s track record of successfully protecting capital and delivering solid returns during good markets, with a stable dividend payout throughout the years.

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Updated by Endowus: August 2021

**Disclaimer: All content found on this page is for information purposes only and should not be considered as an offer, solicitation or advice for the purchase or sale of any investment products. It is recommended that you seek financial advice as to the suitability of any investment. Whilst Endow.us Pte. Ltd. (“Endowus”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or typographical errors. Any opinion or estimate above is made on a general basis and none of Endowus, nor any of its affiliates, representatives or agents have given any consideration to nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Opinions expressed herein are subject to change without notice.

Investment involves risk. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Past performance is not an indicator nor a guarantee of future performance. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.

Please note that the above information does not purport to be all-inclusive or to contain all the information that you may need in order to make an informed decision. The information contained herein is not intended, and should not be construed, as legal, tax, regulatory, accounting or financial advice.