S&P assigns fund management ratings to Fidelity MultiManager Funds

Standard & Poor’s Fund Services, the leading provider of qualitative fund management ratings, assigns Fund Management Ratings to three Fidelity MultiManager Funds, following a detailed qualitative evaluation of the investment process and management of these funds:

Fund Management Rating to Fidelity MultiManager Distribution Fund "A"
Fund Management Rating to Fidelity MultiManager Growth Portfolio "A"
Fund Management Rating to Fidelity MultiManager Income Portfolio "A"

Fund Management Rating to Fidelity MultiManager Distribution Fund "A"

This unfettered fund of funds has been jointly managed since launch by Richard Skelt, the CIO of the investment strategies group, and fixed income specialist Simon Mungall. It aims to offer investors a reasonable level of income and the potential for capital growth alongside a high degree of capital protection gained by diversification through multiple asset classes. But it is not aiming to gain a tax advantage for UK based PEP and ISA investors.

The fund builds on the success of Fidelity's first two unfettered funds-of-funds, launched in 2003. It aims to keep asset allocation fairly close to the neutral position of 40% in each of bonds and equities and 20% in property funds and to add most value through manager selection. To this end relatively aggressive managers with good alpha generation potential are preferred while diversification is sought by selecting funds with a high degree of uncorrelated risks.

Mungall is relatively new to Fidelity, having joined in March 2006 from Aon Consulting, where he was head of fixed income research. His specialist knowledge of bond markets and funds is a welcome addition to the team's skills. He aims to keep the volatility of the bond portion low while adding incremental return through limited exposure to high yield bond funds together with some currency exposure. Property exposure is limited to funds trading at a discount to NAV.

Despite the short track record of this fund, given Skelt's experience and the success of the team's first two unfettered funds-of-funds, it achieves a cautious S&P "A" rating.

Fund Management Rating to Fidelity MultiManager Growth Portfolio "A"

Building on the success of its fettered range of funds-of-funds, in 2003 Fidelity launched the first two in a new range of unfettered funds-of-funds products. Richard Skelt, the highly regarded CIO of the investment strategies group, has been closely involved with the development of this range and was the named manager at launch. He continues to spend more than a day a week exclusively working with the team dedicated to these funds, but since January 2006 the fund has been run by Chris Ralph.

Ralph has more than 20 years' industry experience, mostly in broking, but this is his first responsibility as named manager of an unfettered fund of funds. However, this is not seen as a drawback as the fund is run in a collegiate process with each member of the team of five analyst/managers providing fund ideas and a geographic/asset class input. They are also able to draw on input from the broader team at Fidelity, including Strategic Advisors Inc. in Boston.

In keeping with the fettered range, the aim is to keep asset allocation fairly neutral and to add most value through manager selection. To this end, relatively aggressive managers with good alpha generation potential are preferred and the portfolio is generally diversified through 20-25 funds with a high degree of uncorrelated risks.

Since launch the Multimanager Growth Portfolio has shown good performance relative to our active managed sector and cumulatively over three years ranks in the top third of the peer group. This performance record and the quality of the team allow the fund to achieve an S&P "A" rating.

Fund Management Rating to Fidelity MultiManager Income Portfolio "A"

Building on the success of its fettered range of funds-of-funds, in 2003 Fidelity launched the first two in a new range of unfettered funds-of-funds products. Richard Skelt, the highly regarded CIO of the investment strategies group, has been closely involved with the development of this range and was the named manager at launch. He continues to spend more than a day a week exclusively working with the team dedicated to these funds, but since January 2006 the fund has been run by Chris Ralph.

Ralph has more than 20 years' industry experience, mostly in broking, but this is his first responsibility as named manager of an unfettered fund-of-funds. However, this is not seen as a drawback as the fund is run in a collegiate process with each member of the team of five analyst/managers providing fund ideas and a geographic/asset class input. They are also able to draw on input from the broader team at Fidelity, including Strategic Advisors Inc. in Boston.

In keeping with the fettered range the aim is to keep asset allocation fairly neutral and to add most value through manager selection. To this end, relatively aggressive managers with good alpha generation potential are preferred and the portfolio is generally diversified through 20-25 funds with a high degree of uncorrelated risks.

Since launch the Multimanager Income Portfolio has shown good performance relative to our cautious managed sector and cumulatively over three years ranks in the top third of the peer group. This performance record and the quality of the team allow the fund to achieve an S&P "A" rating.