FIAM Strategies

FIAM Select International

FIAM Select International seeks to provide excess returns relative to the MSCI EAFE (Net) Index while maintaining similar fundamental characteristics.

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Investment Approach

The strategy utilizes a disciplined investment approach that capitalizes on Fidelity’s fundamental research by combining qualitative stock selection with quantitative risk control. The available investment universe is comprised of stocks in Japan, the United Kingdom, Europe ex UK, and Asia Pacific ex Japan rated attractive by our analysts. The discipline uses a quantitative model to match the regional weights of the portfolio to the index. This approach is designed to diversify specific risk, reduces tracking error and factor risk, and controls transaction costs.

Broadly diversified portfolio

Broadly diversified portfolio that seeks to consistently deliver value added performance.

Research coverage

Pure play on one of the world’s largest buyside research platforms that has extensive depth and breadth of fundamental research coverage.

Experience

Experience and consistent approach of the same portfolio manager since the discipline’s inception in 1989.

Investment Process

Global Research: Idea Generation

  • Developed market universe
  • Review all buy-rated stocks
  • Review holdings of analyst run funds, sleeves, and research coverage portfolios

Stock Selection

  • Focus on highly rated stocks (best ideas) by Fidelity fundamental analysts
  • Monitor earnings estimates relative to consensus
  • Review RCP (research coverage portfolios) ranks and weights
  • Prefer long-term winners and best ideas
  • Monitor long-term track records of analysts
  • No emerging-market stocks unless benchmark includes emerging market exposure

Portfolio Construction

  • Investments only in benchmark countries
  • Use the MSCI Barra risk model to apply controls relative to benchmark
    • Region/Country +/- 2%
    • Sector +/– 2.5%
    • Market cap, beta, style, and ESG factor exposures
    • Security bounds +/- 2%
  • Cash < 2%, moderate turnover (generally 60%–80%)
  • 50%–60% active share
  • 1.5% to 2% target tracking error* and stock selection > 50% of T.E.

    Select International Portfolio

    • 175-225 holdings

    Key Facts

    Inception Date July 31, 1989
    Benchmark MSCI EAFE (N) - Linked
    Separate account minimum $50M
    Typical portfolio turnover
    60%-80%

    Portfolio Managers

    César Hernández, CFA
    Portfolio Manager

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    * Risk metrics shown are provided for illustrative purposes. Risk metrics are not intended to represent performance of the strategy. They are presented gross of any fees and expenses that would apply to an investment in the strategy. Historical risk metrics do not necessarily guarantee future risk profile of the strategy. Please see the fact sheet for net composite performance which includes accounts managed by FIAM and other affiliated advisers, as permitted.

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