Fidelity launches Emerging Europe, Middle East and Africa Fund

Fidelity International, UK mutual fund manager, today announces the launch of the Fidelity Funds Emerging Europe, Middle East and Africa Fund.

The new fund will be run by Nick Price, a 9 year veteran at Fidelity. Nick will seek to profit from a number of long-term investment trends including the impact of global industrialisation, the rapid urbanisation of the region and continued strong demand for natural resources.

Nick Price comments: “The region of Emerging Europe, Middle East and Africa (EMEA) offers one of the most exciting investment opportunities in today’s market. It has an investment universe of $1.5 trillion and with low correlation to the US, Europe and UK, and low inter-market correlation across the region it offers diversification benefits and the potential for significant risk-adjusted returns.”

The EMEA region embraces the Czech Republic, Egypt, Hungary, Israel, Jordan, Morocco, Poland, Russia, South Africa and Turkey. These countries are rich in natural resources having more than 80% of the world’s proven oil reserves, 97% of the world’s platinum reserves, 95% of the world’s chromium and an abundance of other resources including iron ore, nickel, copper and gold which means the region is well placed to benefit from global secular trends.

“As China and India continue to industrialise we will see rising levels of consumption, resulting in growing demand for oil and commodities from these countries. The EMEA region will be a direct beneficiary of this trend.“ continues Price.

“In addition, the EMEA region is enjoying significant productivity gains that are a direct result of the global export of cheap manufactured goods from China and India. While this would be a potential threat to developed economies, the EMEA region can benefit from first time access to cheaper technology.”

Fidelity Funds Emerging Europe, Middle East and Africa Fund

The fund, which is domiciled in Luxembourg, aims to generate long-term capital growth through investing primarily in securities of companies which have their head office or which have a predominant part of their activity in Central, Eastern and Southern Europe (including Russia), Middle East and Africa. It will typically hold between 50 and 70 stocks.

The benchmark of the fund is the MSCI Emerging EMEA Index (capped 5%). However, the manager will not be constrained to this benchmark and will therefore be able to invest in other countries in the region such as Bulgaria, Estonia, Kazakhstan, Latvia, Lithuania, Oman, Qatar, Romania, Slovenia and the United Arab Emirates, where suitable opportunities arise.

The fund has Dollar, Euro and Sterling share classes. The Sterling share class has an initial charge of 3.5% and an annual management charge of 1.5%. The minimum investment in this share class will be £1,000 for lump sum investments and £50 for monthly savings plans.