Thursday April 12, 11:45 AM
Fidelity International Opportunities Fund |
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By Personalfn.com
Summary
Type: Open-ended Equity: Diversified
Benchmark: BSE 200**
Min. Investment: Rs 5,000
Face Value: Rs 10
Entry Load: 2.25%*
Exit Load: 1.00%***
Issue Opens: April 9, 2007
Issue Closes: April 30, 2007
* Entry load of 2.25% will be charged for investments less than Rs 50 m. Nil for investments above Rs 50 m.
** A custom benchmark created using the BSE 200 to the extent of 65% of portfolio and MSCI AC Asia Pacific (excluding Japan) for balance 35%.
*** Exit load of 1.00% will be charged if redeemed within 6 months from the date of allotment.
Investment Objective*
The investment objective of the Scheme is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities including equity derivatives in the Indian and international market.
*Source: Offer document
Is this fund for you?
Fidelity (FIDL.BO, news) International Opportunities Fund (FIOF) is an open-ended diversified equity fund. This offering from Fidelity Mutual Fund opts for a rather unique investment strategy for generating capital appreciation. Besides investing in the Indian stock markets, the fund will also tap opportunities in global markets.
While investing in global markets, the fund will focus more on the Asia-Pacific region (excluding Japan), which includes countries like Hong Kong, Singapore, Australia and China among others. FIOF will invest in stocks across market segments (large cap, mid cap, small cap) and sectors.
By investing in global stock markets, the fund aims to attain a higher level of diversification. Having said that, investors would do well to understand that investing in global stock markets entails taking on risks arising out of the economic and socio-political conditions of those countries.
Fidelity Mutual Fund is guided by well-defined investment processes and its sponsor Fidelity International has considerable experience in managing money across global markets. These factors can aid the fund going forward. In our view, the investment strategy adopted by FIOF appears interesting as it provides investors with the opportunity to have exposure to global equities in their portfolios. However, the same also entails taking on commensurate risk. Given that the fund is presently in its new fund offer (NFO) stage, we recommend that investors evaluate the fund's performance over a 3-5 year period and make an investment decision accordingly.
Portfolio Strategy
FIOF is mandated to invest between 80%-100% of its assets in equity and equity related instruments; at least 65% of assets will be invested in Indian equities and upto 30% in international markets (foreign securities) with a bias towards the Asia-Pacific markets (excluding Japan). However, the fund has indicated that investments in foreign securities could be less than 30% of the assets due to the limit set on investments in foreign securities or could be higher subject to the limit specified by Securities and Exchange Board of India, in case of amendment in the tax laws. The fund house can hold upto 20% of its corpus in debt and money market instruments.
| Instruments |
Allocation Range |
| Equity and equity related instruments |
80%-100% |
| Debt and money market instruments |
0%-20% |
The fund will adopt a bottom-up approach for stock selection i.e. it will aim for a stock-specific investment strategy rather than a sector-specific strategy. It can invest in derivative instruments for the purpose of hedging, portfolio balancing and enhancing returns. The fund house has indicated that it may also invest in derivative instruments in international markets as and when the same is permitted.
Fund Manager Profile
Mr. Rajesh Singh, Fund Manager, is a Mechanical Engineer from IIT, Kanpur. He also holds a degree in management from IIM, Ahmedabad, and a CFA charter. He joined Fidelity as an investment analyst in Hong Kong in May 2000. In 2002, he moved to Boston where he was responsible for managing Fidelity's Global Financials Fund. Prior to joining Fidelity, Mr. Singh was associated with CLSA Securities and Tata Steel (TISC.BO, news) among other companies.
Mr. Leng Ng is a Fund Manager (Foreign Securities) is a Bachelor of Business Administration and has done C.F.A. Level 1. He joined Fidelity International, Singapore, as a Portfolio Management Services Specialist in 2005. Prior to joining Fidelity, Mr. Ng was associated with Capital International as a Portfolio Control Analyst.
Outlook
FIOF is mandated to invest in stocks across market segments and sectors in Indian as well as global markets. Hence, the fund is theoretically well placed to benefit from diverse investment opportunities available in India and other countries. Also the mandate to invest a portion of the portfolio in debt instruments can prove useful when the stock markets fail to offer attractive investment opportunities.
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