Lawrence Hanson

Fidelity International has launched the Fidelity Global Long Short Fund in Australia, managed by London based Portfolio Manager Dmitry Solomakhin.

The actively managed global equities fund adopts a long short strategy and is managed on an unconstrained and benchmark unaware basis. It will typically hold 45 – 55 long and 25 – 35 short positions. The fund aims to achieve a return in excess of the MSCI All Country World Index NR (ACWI), after fees, over a minimum suggested time frame of seven years

Fidelity Managing Director, Lawrence Hanson, says the launch of the fund in Australia comes as a response to growing client interest in, and demand for, an alternative to traditional global equities strategies.

“We have seen increased interest from clients who are looking to generate higher levels of returns, and who are comfortable taking on the risks and elevated volatility that comes with a strategy like the Fidelity Global Long Short Fund.

“We already offer a range of products and investment choices for Australian investors, and this fund expands the Fidelity offering in Australia, providing investors with further access to our global investment capability.

Portfolio manager, Dmitry Solomakhin, says the investment philosophy of the fund is grounded in the belief that markets are inefficient which creates opportunities for active management.

“This fund will apply a contrarian value approach to investing and will seek out opportunities that differ from the prevailing market sentiment.”

“Investor sentiment can be as important as business fundamentals, and when implemented effectively, a contrarian investment approach can provide a superior risk-adjusted return.”

“This approach requires rigorous research and strong conviction in the face of opposing views. It’s driven by fundamental research that invests in out-of-favour securities which are significantly mispriced due to structural and/or cyclical concerns. Opportunity also lies in using short exposure to benefit from stock price falls.”

“In the current climate of market stress, with investors contending with inflation, tightening monetary policy and growth headwinds, there is an abundance of fear. This environment creates a rich pool of contrarian investment opportunities.”

Mr Solomakhin says the fund offers a number of benefits for investors:

“It provides the potential for long-term capital growth and good performance through active management from both the long and short side.

“The fund provides diversification, compared to many more mainstream investment funds and index approaches.

“By investing in the fund, investors can access the investment knowledge and expertise of Fidelity’s global network of investment professionals.”

Mr Solomakhin adds that the fund is suitable for use as a satellite allocation for those investors seeking capital growth with a high risk tolerance.

“This fund is best suited to long term investors seeking capital growth and who have a very high risk and return profile for that portion of their investment portfolio,” says Mr Solomakhin.

Zenith has initiated research coverage of the Fund with a Recommended rating. Zenith has a high regard for Solomakhin and his differentiated investment process. In addition, we view Solomakhin’s sole focus and Fidelity’s breadth of resources favourably. Although the Fund was recently incepted, Zenith highlights Solomakhin’s track record generating impressive long-term excess returns utilising the same strategy*.

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