Two Fidelity funds might share similar names and sit in the same sector, but their performance is markedly different.
The £240m Fidelity Multi Asset Adventurous fund has outpaced its peers, returning 14.9 per cent over three years, against the IA Flexible Investment sector return of 9.1 per cent.
By comparison, FE data shows the £9m Fidelity Multi Asset Open Adventurous fund has trailed behind the peer group average, returning just 6.3 per cent over three years.
The larger Adventurous fund, which was launched in October 2010, has benefitted from a heavy exposure to the US, where almost half of the portfolio is invested.
As well as a 28.5 per cent exposure to the UK, the fund also has pockets of investment in Australia, Germany, Japan, Switzerland, France and Hong Kong.
Financials, industrial, information technology and healthcare are some of the preferred sectors chosen by fund managers Kevin O’Nolan and Nick Peters.
The fund, which is ranked 27th in the sector, has benefited from having the freedom to invest across geographies, sectors and asset classes, and can also use derivatives to reduce risk and cost.
According to the latest factsheet, the fund invests mainly in funds managed by Fidelity, but has top holdings in SSGA US Dividend ETF at 3.8 per cent, Dow Jones UBS Energy Index at nearly 2 per cent, and Dow Jones UBS Agriculture and Livestock at 1.5 per cent.
The Open Adventurous fund, which was launched in 2013, is far lower down in the sector ranking at 92nd place.
Nick Peters also helps co-manage the fund, but has assistance from James Bateman.
The fund management pair allocate just over a quarter to the US, and have smaller chunks invested in Europe, Asia Pacific and Japan.
Both funds have approximately 29 per cent invested in the UK market.
According to the Open Adventurous fund factsheet, the portfolio has the freedom to invest in funds managed by third-party providers and funds managed by Fidelity.
The factsheet also makes it clear it may not be appropriate for investors who plan to sell their shares in the fund within five years.
Top holdings include BlackRock Global Property Securities Equity Tracker at 9.2 per cent, Majedie UK Equity at 7 per cent and Fidelity Index US at 6.5 per cent.
Both funds have a minimum investment of £1,000 and an annual charge of 0.75 per cent.
| Fidelity Multi Asset Adventurous | Fidelity Multi Asset Open Adventurous |
| 1. SSGA US Dividend ETF 3.8% | 1. BlackRock Global Property Securities Equity Tracker 9.2% |
| 2. Dow Jones UBS Energy Index 2% | 2. Majedie UK Equity 7% |
| 3. Dow Jones UBS Agriculture and Livestock 1.5% | 3. Fidelity Index US 6.5% |
| 4. Dow Jones UBS Industrial Metals 1.1% | 4. Artemis Income 6.5% |
| 5. Fidelity Institutional Liquity US 1.1% | 5. Vulcan Value Equity II 6.2% |
Adviser view:
Simon Torry, chartered financial planner at SRC Wealth Management, said: “Given that 76 per cent the Adventurous fund’s holdings are in equities, I would ask whether there is a lack of bond exposure in the fund.
“The fund is just about outperforming its Morningstar GBP Aggressive Allocation benchmark, albeit at the expense of slightly higher volatility. With total costs at 1.14 per cent, this fund is not cheap.”
“Another issue I have is in the fund’s claim that it has a bias towards the UK, admittedly its UK holding is the second largest, but its largest holding is the US.
“I am also disappointed by the lack of diversification and exposure to fixed income in the Open Adventurous fund, with more than 77 per cent of its holdings in equities.
“Given the fund was only launched in 2013, it is perhaps a little too early to pass judgement, although early results do look positive.
“Ongoing charges of 1.65 per cent does not make this fund cheap.”
katherine.denham@ft.com