12th December 2019

Open Banking still flying under the radar two years on

London, 11 December 2019: With 2020 fast approaching, Tom Stevenson, investment director for Personal Investing at Fidelity International, selects his four fund picks for the year ahead:


“The outlook for markets next year is improving somewhat after a mid-year pause for breath. With the Federal Reserve cutting interest rates three times between July and September, I expect economic activity to pick up from the mid-cycle slowdown we’ve experienced since the summer. That should help corporate earnings improve after a run of disappointing quarters.


“In addition, with a US election taking place in November 2020, the expectation is that Donald Trump will in due course row back from his aggressive stance on trade with China in a bid to put the economy on firm foundations ahead of the vote. Less trade tension, continued easy monetary policy, rising earnings and a robust jobs market should be good news for investors.


“However, I am inevitably more nervous about the outlook given the strong returns of the funds I selected for 20191. For that reason, I am sticking with two of the more defensive of last year’s pick, while adding two new recommendations.”


Liontrust UK Growth Fund


On this side of the pond, the prospect of at least a partial Brexit resolution, whichever party wins the election, should combine with low valuations and improving sentiment to give the out-of-favour UK market a boost. The Liontrust UK Growth Fund, managed by Julian Fosh and Anthony Cross, looks for companies with pricing power, the ability to charge a little bit more, which in turn leads to high and sustainable profits. This looks like a solid way to play the UK market in a year when it is unclear whether the value or growth styles will dominate.”


Fidelity Global Dividend Fund


“The first of my repeat recommendations is the Fidelity Global Dividend Fund, managed by Dan Roberts, which invests in resilient businesses with an eye on capital protection as much as long-term income growth.


“With interest rates unlikely to rise much next year, a focus on income should continue to deliver good returns and I really like this manager’s cautious approach. A former accountant, Roberts places a heavy emphasis on scrutinising financial statements to ensure that companies can continue to pay their dividends through thick and thin.”


Artemis Global Emerging Markets Fund


“If there is a recovery in the global economy, one consequence may be a slight weakening of the dollar as investors feel less need to seek out the safe haven of the world’s main reserve currency. A falling dollar is generally good news for emerging market investments and this year I’m looking to increase my exposure to this attractively-valued part of the market. A new fund on our Select 50 list this year is the Artemis Global Emerging Markets Fund, managed by a former Fidelity analyst, Raheel Altaf.


“His approach is to find shares with good growth prospects, attractive valuations and a catalyst for a future upward re-rating. This is a well-diversified fund, which eliminates some of the company-specific risk that can often hurt the performance of an emerging market fund.”


Fidelity Select 50 Balanced Fund


“Finally, I’m sticking with the Fidelity Select 50 Balanced Fund. This fund divides its assets between shares and bonds and invests all around the world, so it is well-placed, whatever the environment. It’s been one of the most popular on our platform in the two years since we launched it, and Ayesha Akbar, who has managed the fund from the outset, has done a great job of delivering capital growth without the volatility that can be off-putting for investors in a pure equity fund.”


- ENDS –


Notes to editors:

1Performance of last year’s four fund selections, and additional 2020 selections. Performance figures given are net of fees. Source: Refinitiv, December 2019


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