Fidelity Multi Asset Funds trim commodity, equity and property overweights

Trevor Greetham, portfolio manager of Fidelity's Multi Asset Funds, has trimmed commodity, equity and property overweights on the basis that growth lead indicators are peaking.

Greetham says: "The OECD lead indicator's six month rate of change is at its highest level since the powerful V-shaped recovery of 1975. The recent volatility in risky assets and the issues in peripheral European bond markets probably signal the peak."

"Global growth is going to be very strong in the first half of 2010 but markets will become increasingly worried about a double dip as the pace of recovery moderates. More often than not, stocks underperform bonds between the peak in the OECD indicator and its next trough, which could be anything up to 12 months from now."

As a result, Greetham is trimming pro-cyclical positions with a view to increasing them again later in the year when he expects investor sentiment to be more depressed. However, he does not plan to underweight equities with the underpinnings of a sustained recovery coming into place.

"Labour markets are starting to improve, there is ample spare capacity to keep inflation low in the big, developed economies and monetary policy has proved itself effective even when interest rates are close to zero.

"I have trimmed commodity, equity and property overweights, with commodities remaining the largest overweight. I remain overweight corporate and high yield bonds but have been adding to positions in government bonds and cash at the margin.

"I have cut global financials to neutral as a tightening of monetary policy is unlikely to be seen in a positive light. My largest overweights remain technology (which I have added to recently) and industrials including resources. At the regional level, I remain overweight Asian and emerging market stocks."

Fidelity's Multi Asset funds are ‘all terrain' funds that allocate to equities, bonds, commodities, property securities and cash. Greetham alters the asset allocation relative to benchmark depending on where the global economy currently sits and he does this using an ‘investment clock' approach.

The range includes Multi Asset Strategic, Multi Asset Defensive and Multi Asset Growth which aim to satisfy a broad range of investors' risk/return needs, from the more defensive investor looking for capital preservation and steady growth to those looking for equity like returns but with lower volatility.

The Multi Asset Strategic Fund is one of 70 funds included on Fidelity's ‘Select List' of funds for self-directed investors, assembled by Fidelity's Fund Manager Selection team from the 1,100+ currently available on its fund platform, Funds Network.  Funds included in the Select List will be available at 0.00% initial charge through Fidelity for ISA and non-ISA purchases until midnight 5 April 2010.

Other Details including Special Terms on Funds included in Fidelity's Select List:

The 0% offer also covers ISA transfers into the 70 Select List funds;
Standard annual management charges and switching charges apply;
The minimum eligible investment to qualify for the offer is £1,000 for lump sums and £50 for monthly savings plans;
There is no maximum amount that can be transferred (subject to ISA allowances);
Offer open from 22 February through 5 April 2010;
ISA Cash Park excluded;
Offer open to self-directed investors only.