Bestinvest says
As a general rule we prefer fund of funds that are unfettered, i.e. have the freedom to select funds from any investment house. However, Fidelity has an extensive product range and as an internal fund of funds it benefits from lower costs than unfettered multi-manager funds. Nonetheless the fund has failed to add value over the last five years and we have higher conviction in other global equity funds.
An internal fund of funds, Fidelity Wealthbuilder targets long term capital growth by investing in an internationally diversified portfolio of Fidelity's in-house funds, biased to the UK. Asset allocation is based on the views of Fidelity’s Asset Allocation Group, modified by the portfolio manager Richard Skelt to meet the objectives of the fund, and takes place in two stages:
- Strategic asset allocation, used to set the benchmark - typically this is not aggressive;
- Tactical asset allocation - setting deviations from the benchmark based on a medium term view of the relative attractiveness of asset classes.
Having set the geographic exposure, Skelt then determines the fund selection and will alter the weightings apportioned to the underlying fund managers in order to exploit their style biases, which are better suited to the current market conditions, for example, towards value (stocks regarded as cheap in relation to their assets) or growth (stocks where their growth potential is under appreciated).