Fidelity Global Dividend A-QInc(G)-USD |
Morningstar's Take
|11/07/2024by Jeffrey Schumacher
| Tristan Purcell was appointed as assistant portfolio manager for Fidelity Global Dividend, effective Oct. 1, 2024. In this role, he will support longtime lead manager Daniel Roberts, who has managed the strategy since its inception in 2012. Purcell was appointed to a similar role for Fidelity Global Equity Income and Fidelity Sustainable Global Equity, both managed by Aditya Shivram. Purcell doesn't yet have decision-making power over these strategies, but Fidelity expects him to become a co-portfolio manager in due course. The announcement doesn't come as a surprise, as Roberts hinted at it when we met in June 2024. According to Fidelity, Purcell has worked closely with Roberts over the past seven years as an analyst covering European and US insurance stocks from 2017-20 and European capital goods companies since 2021. Over this period, the insurance sector has represented 10% to 15% of the portfolio, while the allocation to industrials has been around 20%, of which capital goods has been the largest subsector weighting. Purcell will relinquish his responsibilities as an analyst once he assumes his new role. The appointment can be seen as part of a long-term succession plan, although both Roberts and Shivram have no intention of stepping down in the foreseeable future. Fidelity Global Dividend's People Pillar rating remains Above Average, and its Morningstar Medalist rating remains unchanged. |
| An experienced and savvy stock-picker and a well-designed and consistently executed process support an Above Average rating for the People and Process pillars of Fidelity Global Dividend. Dan Roberts has been managing the strategy since its inception in 2012. He brings more than 20 years of dividend experience to the fund. He earned his spurs first at Aviva and Gartmore managing UK-focused dividend strategies and expanded his investment opportunity set to a global universe when joining Fidelity in 2011. Roberts has skillfully managed the strategy over time, relying on his own groundwork by studying annual reports to identify companies that meet his investment criteria. His deep involvement in company analysis is evident when he explains the rationales for portfolio actions. Roberts leverages the insights of Fidelity’s sector analysts and regional dividend team, but they’re mostly used as sparring partners. As Roberts drives idea generation, company analysis, and execution, there is an element of key-person risk. Plans to hire a dedicated analyst to support Roberts may reduce this risk to some extent. Roberts applies a quality-oriented approach, but with a valuation-conscious mindset. He first screens the universe through a quantitative filter, followed by in-depth bottom-up stock analysis. Roberts looks for companies with predictable and resilient cash flows, reliable business models, transparent financial statements, sound balance sheets, and strong management. It leads to a 40-60 stock portfolio where cyclical industries like banks, energy, and commodities are typically avoided. Instead, Roberts finds good opportunities in insurance, exchanges, consumer staples, and industrials. His focus on balance-sheet leverage and sensible capital allocation becomes evident when assessing historical portfolio changes, as large acquisitions made by Amgen and Newmont were reasons for him to sell these positions. The portfolio has shown a consistent preference for companies with strong economic moats and superior returns on invested capital, underscoring the emphasis on quality businesses. Given its conservative nature, the portfolio beta should remain substantially below 1, while portfolio turnover averages 30% per year. Capacity remains a factor to monitor, as the strategy has accumulated over EUR 15 billion of assets. Overall, the approach strikes a good balance between income, dividend growth, and valuation awareness, while portfolio construction and risk management appear sound. Roberts has built a robust track record since the strategy's inception in 2012, driven by excellent stock selection. While keeping up in rising markets has been challenging at times, the strategy's downside resilience has remained characteristically strong. Patience and a long-term investment horizon are required to reap the strategy's potential for superior risk-adjusted returns. |
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| Morningstar Pillars | |
| People | Above Average |
| Parent | Above Average |
| Process | Above Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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