Fidelity's Siddle reveals strategy overhaul for €9bn fund
European equity specialist nears completion on major change to investment style in blockbuster fund as he puts emphasis on quality.
by Chris Sloley on Dec 11, 2012 at 09:30
Siddle assumed the lead manager role on the blockbuster fund in July when he was named as the successor to Alexander Scurlock. This change in lead manager coincided with Scurlock assuming a new brief with the firm.
In an end of year conference call, Siddle, who also runs the Fidelity Funds – European Larger Companies strategy, revealed he had stamped his own approach on the European Growth fund since assuming control.
‘Alexander ran the fund with a thematic style and what that meant was he positioned for certain themes that he thought were moving investment forward,’ said Siddle.
‘For example, he looked at the future growth of emerging markets or core Europe vs. peripheral Europe or the emergence of the shale gas phenomenon.’
Siddle said he had moved away from this approach and is replacing it with his ‘quality at an attractive cost’ investment style, which he also uses in the European Larger Companies fund.
This change in approach has seen Siddle sell out of 36 holdings in the fund – including tech giant Apple – and assume 20 new positions. These include multinational food company Nestlé and British advertising giant WPP.
‘We have seen an increase in exposure to consumer discretionary names, through names such as WPP and also [publishing specialist] Reed Elsevier.’
‘We have also increased consumer staples, with the addition of Nestlé. We have also reduced our basic materials exposure, through reducing mining stocks.’
Despite his background being in large cap stocks, Siddle said this had not driven the change. Instead, he said, there had been a ‘modest increase’ in the mega-cap and mid-cap names, with a slight reduction in some large cap names.
Siddle said he is in the process of transitioning to the new investment style. He said it is ‘95% in place’ and expects it to have been fully adopted by the end of this year.
The Fidelity Funds – European Growth fund has returned 21.89% over the past three years. This compares to the STOXX Europe 50 CR, which rose 4.79% over the same period.
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