Fidelity Absolute Return Global Equity

The Fidelity Absolute Return Global Equity Fund aims to deliver around cash +3-5% returns with a volatility of 5-7% by consistently capturing proprietary alpha through high-conviction buy and sell ratings from Fidelity’s global research analysts. The investment philosophy centres on integrating Fidelity’s deep research capabilities within a systematic process to generate idiosyncratic alpha, while broadly mitigating market beta and other style biases. The process begins with a comprehensive screening of approximately 2,600 global securities rated by Fidelity analysts who undertake extensive fundamental deep dives, creating models and research notes for each stock and rating them from 1-5. Neutral ratings are excluded, and the remaining securities are scored using a combination of seven proprietary in house developed signals such as research ratings, ratings momentum, and earnings revisions, alongside external signals like consensus ratings and valuation metrics. This scoring filters the opportunity set down to a conviction list of the highest and lowest ranked stocks, forming the basis for the Conviction Buy and Sell lists. These lists undergo further qualitative review, where PMs assess the underlying research, technical conditions, and the level of conviction behind each stock before finalizing the inputs for the mean variance optimiser. The final portfolio typically consists of 150-200 stocks, balanced between long and short positions. Security weights are optimized using the Barra risk tool, ensuring that risk is primarily driven by stock-specific factors rather than unintended market or style biases. Risk management is integral to the process, with strict controls on sector, country, and style exposures, typically maintained within a +/-5% range.