Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.
Investing can be tricky. Few of us have the time or knowledge to sift through the countless number of options out there to decide which suit our particular needs.
As such, the Fidelity Select 50 Balanced Fund offers a one-stop shop to a well-diversified portfolio, without all the hard work of managing the underlying investments yourself.
Bricks and mortar
The Select 50 is a list of Fidelity experts’ favourite funds. It comprises all different kinds of investment - ranging from bonds to equities and alternatives (e.g. commodities and property), spanning different geographies from North America to Emerging Markets.
Ayesha Akbar, manager of the Fidelity Select 50 Balanced Fund, is tasked with selecting which of those 50 funds she feels work together best to generate long-term capital growth. To give her the full flexibility to do that, she can hold up to 20% of assets outside the Select 50.
For Ayesha, all this means that “portfolio construction is absolutely key”. As she explained when we spoke with her recently, she views the difference between her fund and the Select 50 list like that between a house and a pile of bricks.
“You could have the best, highest quality bricks around, but unless you put them together well, you’re not going to end up with a house that’s robust enough to stand the ravages of time or the weather. Essentially, that is what we are doing. The funds are the bricks and we have to put them together.”
A balanced approach
Because of the variety of funds included on our Select 50 list, they tend to perform differently. What affects the performance of, for instance, a Japanese equity fund may have little bearing on a US bond fund. That’s the key to being well-diversified - when one holding struggles, others are there to carry the load.
At the same time, Ayesha skews her portfolio towards holdings she feels can outperform. Fixed limits on her fund allow 30-70% of holdings to be allocated to equities, and 20-60% to bonds (as well as 0-20% in cash).
Right now, she’s happy to take on a little more risk, with 54.7% of the fund allocated to equities, and 31.4% to bonds.
At other times, when she’s feeling more cautious, she’ll change that balance. Investing in the Fidelity Select 50 Balanced Fund allows the experts to decide.
Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Select 50 is not a personal recommendation to buy or sell a fund. This fund invests in overseas markets and so the value of investments can be affected by changes in currency exchange rates. This fund uses financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall. Currency hedging is used to substantially reduce the risk of losses from unfavourable exchange rate movements on holdings in currencies that differ from the dealing currency. Hedging also has the effect of limiting the potential for currency gains to be made. The Fidelity Select 50 Balanced fund investment policy means it invests mainly in units in collective investment schemes. There are just a few fixed limits for the three core elements in the fund. These are 30% to 70% for shares, 20% to 60% for bonds and 0% to 20% for cash. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.
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