Fidelity rolled out four new funds that are all part of a still-expanding category of “thematic” funds, notes John Bonnanzio, fund expert and editor at Fidelity Monitor & Insight.
Thematic funds differ from their usual fare in that they are agnostic in terms of investment style. Most importantly, they have investment themes — some being more specific than others.
Founders Fund, Women’s Leadership and Fidelity’s three-deep lineup of socially conscious (sustainability) index funds are now under its expansive umbrella of thematic offerings. Here are the newest entrants:
Enduring Opportunities Fund (FEOPX)
Co-managed, this stock fund seeks growth by holding equities from around the world — including the U.S. Frankly, Diversified Int’l, Global Equity Income and others already fill that niche. The twist here is that its managers tap Fidelity’s global research expertise in 23 developed and 26 emerging markets.
Also, fundamental (bottom-up) stock selection is combined with systematic portfolio construction with the goal of identifying companies with “sustainable competitive advantages” with “attractive long-term” potential. (Without holdings and other data, we’re unable to verify that claim.)
U.S. Low Volatility Equity Fund (FULVX)
This fund also combines fundamental and quantitative analysis, but its objective is to beat the Russell 3000 with less risk. The only other fund using that benchmark is Event Driven Opportunities, however, it pays no heed to risk.
The task of achieving superior risk-adjusted returns falls to manager Zach Dewhirst, who has been running similar institutional products.
That said, the fund’s formidable objective is not something that investors should expect to “experience” over the short-term, but rather over a full market cycle which Fidelity defines as “generally five to eight years” in duration.
Infrastructure Fund (FNSTX)
As a former industrials and utilities analyst, new manager Pranay Kirpalani is a good fit for a fund focused on infrastructure-related stocks. That universe includes transportation (airports, highways, railroads, ports), utilities (electric, water and gas) and energy (oil and gas).
Given this broad mix, the fund differs greatly from Fidelity’s more sector-focused Select funds. Focusing on growth (and paying no attention to income), Infrastructure’s sector weights (as yet, unknown) will reveal its investment style.
For example, should its manager emphasize traditional old economy utilities, it may tilt towards value. But if Pranay sees opportunity in “disruptors,” such as data centers, logistics or utility-scale energy storage companies, Infrastructure holds the promise of being a focused (and attractive!) growth fund.
The above funds are not yet rated in our service. Granted, it can be exciting to invest in new funds, but our bottom line is that we’ll assign ratings once we better understand these interesting new offerings.
