Fidelity American W

The fund targets long term capital growth from a portfolio composed primarily of US equities. The manager invests across the market cap spectrum, targeting companies with improving fundamentals not yet captured in their share price. Though relatively unconstrained, the portfolio has a fairly large number of holdings and sector positions are kept close to the benchmark. Following a prolonged period of underperformance we put this on a 1-star SELL rating in September 2012. We suspended this rating in December 2012 on a change of manager.

Investment process

The manager combines Fidelity’s proprietary research with his own company analysis, and looks for companies where improving fundamentals are not captured in the valuation. This may be due to such factors as: a) a secular change in the company; b) structural change in the industry; c) short-term factors impacting share price where long-term fundamentals remain; d) restructuring; e) companies where sector relative valuations do not reflect potential; and f) stocks not being followed by other analysts (mainly small-cap). The fund invests across the market cap spectrum; sector positions are typically fairly close to the benchmark, though they are a by-product of stock selection. Though the process is primarily bottom-up (companies analysed in their own right) research also incorporates a global perspective, therefore market sentiment, technical inputs and macro economic factors (world economic influences) are also considered.