Defensive, Balanced and Growth funds will launch on 10 October, using index funds rather than actively managed Fidelity funds to implement asset allocation decision. The funds will be available across two share classes to suit different adviser charging structures: the A share class will include a 1% AMC and with a trail commission of 0.5%, while the N share class with carry a 0.5% AMC with no train commission.
As with the existing Multi Asset range, each of the new funds benefits from diversification across a range of assets offering a store of value – cash and bonds – and stronger growth potential in risk assets such as property shares, equities and commodities.
Greetham uses an ‘investment clock’ and other quantitative models to actively tilt the asset allocation away from the strategic benchmark according to the prevailing economic conditions and the investment outlook as he sees it.
Greetham said: “Global growth is slowing and there are uncertainties about the degree of policy ease we will see. Expect short economic cycles driven by bouts of stimulus by central banks – flexible tactical asset allocation and diversification across asset classes will remain key. Our tactical position is defensive with overweights in government bonds, defensive equity sectors and gold.”
JP Morgan and Schroders have already introduced similar products this year – the latter’s latest Dynamic Multi-Asset Fund, launched in August, has a total expense ratio capped at 50bps.
Ben Waterhouse, head of retail sales at Fidelity Worldwide Investment, added that the new funds would be an alternative solution for cost sensitive investors and those perhaps wishing to avoid stock selection risk.
