Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.
One of the best-sellers on the Fidelity platform so far this year is Rathbone Global Opportunities, which is a stock-picking vehicle with an interesting approach and good long-term record. It is a member of Fidelity’s Select 50 list of handpicked funds and aims to outperform by investing in innovative companies that are growing fast and shaking up their industries.
Managers James Thomson and Sammy Dow think that to be successful, a business must have to offer something that others can't match – a star quality. It must also be easy to understand, different to its competitors, durable to change and difficult to imitate.
The companies they invest in can be of any size, although their sweet spot is mid-cap growth stocks in the developed markets. The managers’ speciality is spotting these businesses before they become household names.
What are the manager’s latest views?
Thomson recently took part in a panel discussion hosted by Fidelity where he explained the attractions of investing in a global fund and shared some interesting insights about his current thinking and the positioning of the portfolio.
During the discussion he said that there are some unmissable opportunities outside of the UK, with a good example being his largest holding Nvidia, which designs the chips that are at the heart of the Artificial Intelligence (AI) revolution. He thinks that we are right at the start of this next generation of computing and that AI could drive half of all incremental gross domestic product (GDP) growth over the next decade.
Process and portfolio
When asked how he manages the fund, Thomson said that he looks for industry champions, under the radar or out of favour growth companies. “I like the highest quality unblemished growth businesses that I think will see us through a variety of macroeconomic environments.”
At the end of April the portfolio contained just 54 holdings with the ten largest positions accounting for 26.4% of the assets. These included the likes of Nvidia, Microsoft, Costco, Amphenol and Martin Marietta Materials.
Rathbone Global Opportunities - top 10 holdings
- Nvidia
- Microsoft
- Costco
- ASML
- Martin Marietta Materials
- Intuit
- Amphenol Corp Class A
- Linde PLC
- Hermes International
- Cintas Corp
Source: Fidelity International, 31.3.24
Over 90% of the fund is invested in stocks with a market value of more than £10bn. It is also heavily skewed towards the US, which makes up around two-thirds of the portfolio, with most of the rest in Continental Europe and only 6% allocated to the UK.
Performance
Over the 5 years to the end of April the Rathbone Global Opportunities fund generated a cumulative return of 67.44%, which was well ahead of the IA Global sector average of 53.04%. This puts it in the top quartile of performers over the period. Please remember past performance is not a reliable indicator of future returns.
How do the costs stack up?
The latest available ongoing charges figure is 0.77%, which is about what you would expect from a successful, actively managed fund that invests in a liquid asset class.
Who would it be suitable for?
A concentrated portfolio like this will inevitably be pretty volatile, which is why it is considered to be a higher risk, higher potential reward option. As the dividend yield is less than half a percent it would mainly be suitable for long-term investors who are looking for capital growth.
More on Rathbone Global Opportunities Fund
| (%) As at 31 May |
2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | 2023-2024 |
|---|---|---|---|---|---|
| Rathbone Global Opportunities | 19.6 | 6.7 | -6.8 | 21.6 | 17.5 |
Past performance is not a reliable indicator of future returns.
Source: Morningstar, share price total returns from 31.5.19 to 31.5.24. Excludes initial charge.
Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This fund invests in a relatively small number of companies and so may carry more risk than funds that are more diversified. Select 50 is not a personal recommendation to buy or sell a fund. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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