Investors' needs are increasingly diverse, shaped by different objectives, regulatory environments and governance requirements. This is partly because the economic backdrop has become more uncertain, making investment decisions more complex - flexibility and the ability to customise are becoming more valuable than ever.
Forward-looking managers are evolving their capabilities accordingly. Our focus is on applying investment expertise across multiple dimensions, combining fundamental and systematic approaches where appropriate, and extending active insight beyond security selection into portfolio construction and implementation. The objective is not proliferation, but relevance. In today's environment, where outcomes are shaped by how exposures are combined as much as the insights that underpin them, the ability to deliver value and client outcomes through purpose-built solutions is becoming a defining feature of effective active management.
That said, active strategies can take many forms. From systematic to more traditional discretionary approaches, they can be balanced for efficiency, transparency and control, and implemented through a range of vehicles. The objective is not to determine a level of conviction, but to make active more intentional, measurable and aligned with broader allocation decisions and outcomes.
As an example, we are experiencing rising client interest in disciplined systematic solutions which can provide benchmark-aware exposures while also embedding value-adding research signals. Such strategies can consider the potential for tracking error during portfolio construction, allowing clients to manage the extent to which they accept market-relative risk.
On the other hand, we are also seeing renewed interest for high-conviction solutions that can take larger index-relative positions to address specific challenges presented by current market conditions. These include the growth of certain thematic and idiosyncratic stock level risks resulting from higher market concentration within a handful of dominant and often correlated mega-cap stocks, the subsequent reduction of inherent index diversification, and the impact of sentiment and momentum-driven flows on short-term return dispersion. Elevated dispersion, in this sense, is a feature of markets that must be managed and harnessed simultaneously through thoughtful portfolio design.
A client-centric approach
Each client is different and increasingly wants the benefits of our research delivered in a manner which aligns with their own specific circumstances, objectives and constraints. As such, we have developed a holistic suite of research-powered investment capabilities which translate the proprietary insights of our global investment platform into action through precise and transparent exposures across asset classes, investment styles, market segments and target outcomes. This suite of solutions offers a balance of conviction, control and consistency, so clients can access our research insights in manner which suits them best.
Through continuous improvement and a relentless focus on innovation, we seek to strengthen our research edge and evolve, refine, expand and optimise our solutions suite in line with our clients' requirements over time. Research-powered investing has always been in our DNA and remains our distinctive edge, but our ultimate focus is on ensuring that we can provide the solutions that help our clients achieve their goals.
The power of Fidelity research
At the fulcrum of this new regime is the notion that active top-down and bottom-up decisions will be more important in generating attractive risk-adjusted returns. However, the quality of research insights that underpin these decisions will be the key determinant of the outcomes they deliver. Ultimately, our clients still want to benefit from the value that our research provides - it has been proven to deliver value over extended timeframes.
This is why we have located our investment teams strategically on the ground in key capital markets around the world, allowing them to use their local knowledge and privileged corporate access to carry out rigorous due diligence of businesses, their customers, suppliers and competitors. This provides an in-depth understanding of the opportunities and risks that potential investee companies face.
At the same time, these professionals are structured as a centralised team within our broad global investment platform. This enables collaboration between experts operating in diverse fields across value chains, sectors, geographies, and asset classes, within both public and private markets.
Only through this connectivity can our team assess the most complex, interlinked global economic systems, uncovering nuances which others miss. Insights do not necessarily need to be differentiated or contrarian to add value, but they should deliver conviction. It is this informational edge which allows us to deliver value for our clients, as has been proven over an extended timeframe.
Cumulative relative returns of Fidelity fundamental research ratings
For illustrative purposes only. Past performance is not an indication of future results.
Source: Fidelity International, 31 December 2025. Regional returns weighted by market cap of companies rated either buy/outperform or sell/underperform. Value-add calculated versus regional indices. Between the start of 2010 and end of 2025, our global equity research team's buy and outperform recommendations delivered 56.2 per cent cumulative market-relative performance, while stocks attributed sell and underperform recommendations lagged, on average, by 18 per cent.
Important information
This is for investment professionals only and should not be relied upon by private investors. Investors should note that the views expressed may no longer be current and may have already been acted upon. Past performance does not predict future returns. Returns may increase or decrease as a result of currency fluctuations. The value of investments and the income from them can go down as well as up so you may get back less than you invest. The value of investments in overseas markets can be affected by changes in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. The Key Investor Information Document (KIID) is available in English and can be obtained from our website at www.fidelityinternational.com. The Prospectus may also be obtained from Fidelity. Issued by FIL Pensions Management. Authorised and regulated by the Financial Conduct Authority.
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