Fund spotlight: Fidelity’s FAST Europe 1 EUR ACC Newcits
This year, in the traditional equity L/S strategy category one fund has stayed consistent: Fidelity International’s Fidelity Active Strategy (FAST) Europe 1 EUR ACC fund. Since the fund’s launch in 2004 its performance relative to the MSCI Europe Index has been impressive, delivering 46.7 per cent returns over the last five years (versus 1.8 per cent for the Index). Speaking to Hedgeweek, Product Director Alex Homan explains that initially the fund was UCITS non-compliant, using direct short selling and bank loans to achieve its targets, but at the start of 2008 the decision to convert it into a full UCITS structure was taken. “Since Anas Chakra began managing the fund in 2006 it’s up 10.5 per cent versus the Index down -19.1 per cent, so we’re looking at over 8 per cent annualized relative outperformance.” In 2007 the fund’s short exposure was largely concentrated in financials. In 2008 it was real estate. In 2008/9 returns were enhanced by receipt of option premiums. As Homan points out: “The beauty of this fund is the opportunistic way we run it.”
Homan says that the reason behind the fund’s success is twofold: structural and strategic. “All the hard work we put in between 2006 and 2007 really stood us in good stead post-Lehmans. We have our own administration function and independent custodians so it really is the big AMs like us, who already have the infrastructure in place, that benefit from UCITS.” Fidelity also places great emphasis on selecting the right manager with demonstrable risk management and stock picking skills. “Once we’ve identified the manager, like Anas, we put our full resources behind them,” says Homan. “Strategically, we’re getting more clarity over where to develop the short book. Our focus is on cyclicals; particularly industrials.” Homan says that the fund is long-focused on two segments: consumer discretionary, in which the fund is net overweight, and IT – particularly defensive revenue streams such as SAP. Having opened the EUR1.7 billion fund for an additional EUR600 million this month it appears to be going from strength to strength. “I dispute those commentators who say UCITS are underperforming Cayman-based funds,” concludes Homan.
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