Fidelity launches new U.S. funds for investors looking for income opportunities
~ New funds will provide access and income opportunities in the world's largest stock market ~
TORONTO, Nov. 7, 2012 /CNW/ - To help Canadian investors access the world's largest stock market, Fidelity Investments Canada ULC today announced the launch of new U.S. mutual funds aimed at Canadian investors seeking income opportunities and diversification benefits in this market. The new options include Fidelity U.S. Monthly Income Fund, Fidelity U.S. Dividend Fund (including a currency neutral version), as well a capital yield version of the Fidelity U.S. Monthly Income Fund.
Fidelity Investments organization ("Fidelity") has over 65 years of experience in managing U.S. equity portfolios. Investors will benefit from Fidelity's experience as well as the expertise and access of its investment professionals including teams of portfolio managers, research analysts and traders.
"Today, macro-economic issues like the current low-interest environment and ongoing global economic uncertainties are top of mind for many investors. These uncertainties can make it hard for anyone to focus on the long-term investments," said Craig Strachan, Vice President, Head of Product, Fidelity Investments Canada. "However, if investors look past these uncertainties we believe that there are positives in the markets including the health of corporate America."
The U.S. market has many stable high quality companies with strong global brands. Interbrand's survey of the best global brands illustrates the dominance of the U.S. - the top eight brands were all U.S. companies, as were 14 of the top 201. Brands are powerful assets which help companies withstand uncertain economic times.
Fidelity U.S. Dividend Fund
Fidelity U.S. Dividend Fund leverages the depth and breadth of Fidelity's fundamental research coverage to identify high-quality U.S. dividend paying equities. The fund is designed as a core holding that provides Canadian investors the potential for capital appreciation and income. The asset class and the U.S. dollar exposure that the Fund provides offer great diversification benefits for Canadian investors.
"Investing with a focus on dividend-paying stocks has historically delivered a number of desirable outcomes," said Strachan. "Many companies in the U.S. currently have a high level of cash on their balance sheets, which may increase their capacity to pay dividends. Given these conditions, we believe this is an excellent time for Canadians to look at U.S. dividend fund options for their portfolios."
The fund is managed by James (Jim) Morrow who runs a similar fund for U.S. investors. He began his career at Fidelity in 1998 as a research analyst and has extensive experience managing funds for investors in the United States. Morrow works closely with his team to search out the best ideas from Fidelity's extensive research network, focusing primarily on a company's financial stability, potential to generate sustainable return on equity over time and valuation when deciding to invest in the company.
Fidelity's suite of monthly income funds
For income-seeking investors who do not want full equity exposure, Fidelity U.S. Monthly Income Fund joins Fidelity Investments Canada's existing suite of monthly income funds, including Fidelity Monthly Income Fund and Fidelity Global Monthly Income Fund. This new fund is another option for investors looking for regular income and the potential for capital appreciation. Fidelity Investments Canada's suite of monthly income funds provides investors a way to increase the diversification of their portfolios by asset class, geography, industry and currency.
Managing Fidelity U.S. Monthly Income Fund are Geoff Stein and Mariana Egan. Stein is one of the portfolio managers of Fidelity Monthly Income Fund. Stein and Egan are also the portfolio managers of the Fidelity Global Monthly Income Fund. Both are asset allocation experts that leverage Fidelity's extensive global macro research. While the neutral mix is 50% equity and 50% fixed income, the fund may over- or underweight asset classes to aim to manage risk and seek to capitalize on changing market conditions.
Providing more tax-efficient options for income investors
Fidelity Investments Canada is also expanding its capital yield offering by launching Fidelity Tactical Fixed Income Capital Yield Fund and Fidelity U.S. Monthly Income Capital Yield Fund. The capital yield versions of these funds seek to provide a return similar to that of Fidelity Tactical Fixed Income Fund and Fidelity U.S. Monthly Income Fund, respectively, less transaction and hedging costs, while generating tax-preferred capital gains, thereby aiming to enhance the investor's after-tax returns.
These new capital yield products build on the success of Fidelity Investments Canada's other capital yield products which have had great support from investors and advisors.
"One of the many challenges financial advisors face is educating their clients on how they can meet their retirement goals. It's not easy finding options that could provide the cash flow for an investor's retirement. At the same time it is easy for investors to underestimate not only how much income they will need, but also how long they will live in retirement," said Strachan. "Financial advisors have a pivotal role in helping their clients understand this dichotomy, and in today's low interest rate environment it's important to consider options that provide exposure outside of Canada."
Read a fund's prospectus before investing. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. Investors will pay management fees and expenses, may pay commissions or trailing commissions and may experience a gain or loss.
1 Interbrand Best Global Brands Report, October 2012
About Fidelity Investments
Fidelity Investments Canada ULC is part of the Fidelity Investments organization of Boston, one of the world's largest providers of financial services. 2012 marks 25 years of success in the Canadian marketplace, where Fidelity manages a total of $68 billion in mutual fund and institutional assets. This includes $14 billion in assets for institutional clients including public and corporate defined benefit pension plans, endowments, foundations and other corporate assets on behalf of clients across Canada.
Fidelity Investments Canada provides Canadian investors a full range of domestic, international and income oriented mutual funds, as well as asset allocation and managed solutions and the high net-worth program, the Fidelity Private Investment Program. Fidelity funds are available through a number of advice-based distribution channels including financial planners, investment dealers, banks, and insurance companies. Fidelity Investments Canada is a proud supporter of the Boys and Girls Clubs of Canada and we are dedicated to helping young Canadians realize their full potential as productive, responsible and caring citizens.
SOURCE: Fidelity Investments Canada LimitedFor further information:
Vice President, Corporate Affairs