Fidelity International (Fidelity) is well known for delivering superior equity returns. Our performance is driven by a commitment to research and bottom-up stock picking. Since the past cannot guarantee the future, only something deeply ingrained in an organisation would convince investors it can repeat its successes, no matter what happens to global markets or the investment industry. We believe that Fidelity, more than any other company, has a single-minded determination to deliver the best for our clients. The strength of our resources - throughout the business - ensures we can achieve this goal.
Fidelity has developed one of the industry's most sophisticated research operations. In addition to the investment professionals in twelve Fidelity International offices around the world, we can share the analysis generated by Fidelity Management and Research using a proprietary global communications network. This enables us to:
Analysts are based in the region they cover, so they can monitor and interpret the impact of international and local events as they happen. Local analysts also work closely with their colleagues in other parts of the world to encourage cross-fertilisation of ideas across regions and allow company profiles to be built on a global sector basis.
In addition, we have a Global Sector Team to communicate global investment strategies, ideas and themes. Our research teams are also organised into seven broad industry groupings to reflect the global context we operate in and the ever-increasing globalisation of the companies we cover.
We believe companies' true potential can only be fully uncovered by keeping their operations under the microscope. This is why the cornerstone of our research process is regular company meetings.
Fidelity's size and reputation enables us excellent access to key company personnel. Whereas our competitors might visit a company once or twice a year, our analysts and portfolio managers make contact with them at least once a quarter. This gives us the opportunity to gain greater insights into a company's health and focus on specific business issues, rather than listening to their standard presentation.
Information is only valuable to the extent that you can filter it and get to the heart of what is useful. Our analysts develop models appropriate to the individual characteristics of companies within their sector, including our own earnings forecasts, balance sheets and cash flows, so we don't need to rely on broker statistics. Once they have rated a company, our analysts communicate their views to the portfolio managers. They are assessed on their ability to "sell" their ideas and the value added by their stock recommendations.
Although company research will always underpin their decisions, portfolio managers are given considerable freedom to follow their own particular style within a controlled portfolio framework.
Portfolio managers' decisions reflect a combination of:
Controls are an integral part of our process. Portfolio management, trading, and administration are carried out by separate teams. We also have oversight committees, compliance teams, and controls on our employees' personal security trading. These measures reflect our aim to be in a class of our own in terms of business ethics, as well as investment performance and client service.
Our investment approach has always been based on a firm conviction that the key to producing above-average, long-term results is to focus on the prospects for individual companies rather than trying to predict economic trends. This is why in-depth company research has always been the core of our investment process.
* World's stock market capitalisation defined as MSCI World Index.
** As at 31 March 2011. This figure reflects the resources of FIL Limited and FMR LLC. FIL Limited is able to access sub-advisory and research services from subsidiaries of FMR LLC. FIL Limited and FMR LLC are separate and independent companies with certain shareholders in common.