Fidelity's MultiManager process

Fidelity MultiManager embraces an investment process that is a team effort. Constructing and managing these portfolios is complex, so we created one of the City's largest teams, dedicated to the multi-manager discipline. While our multimanager research focuses on manager analysis instead of company analysis, the investment process is run with the same discipline that underpins our single-manager funds.		*“Fidelity classifies its approach to multi-manager investment as being an alpha generator.”*

Successfully selecting and blending funds is the primary driver of delivering alpha, or out-performance, within our MultiManager Portfolios. Funds which generate alpha, at different times and in different market conditions, can be combined to generate more consistent alpha at portfolio level.

Portfolio construction

Our portfolio is supported by both quantitative and qualitative proprietary research.

Our MultiManager team achieves diversification by selecting high-performing funds which show low correlations to each other. These can include differing management styles, investment approaches, style biases, or investment mandates that lead to biases in particular market segments.

By combining funds with different styles in the portfolio, they can produce above-average returns for below-average risk.

Portfolio monitoring

Risk management processes exist at various stages throughout our investment process. The same systems that track our portfolios also monitor our MultiManager funds to ensure they comply with their investment objectives and guidelines.

This can also drive the research and idea generation process if, for example, the investment team want to remove an increasing bias in the portfolio. This could prompt the team to research replacement funds for the portfolio.

Each MultiManager fund is reviewed quarterly as part of a formal process to ensure the best ideas stay in the portfolio.

Further information

	MultiManager Portfolio compositions (PDF)

	Reasons why (PDF)