Asset manager Fidelity International has launched the Global Future Leaders Fund, offering investors access to promising small and mid-cap equities in developed markets.
The fund invests in early-stage stocks that are driven by "structural shifts, technology-driven disruptions or evolving consumer behaviours".
According to data shared by the asset manager, global mid-caps and small-caps have consistently produced superior returns compared to large-caps in the last 25 years.
The portfolio will consist of 40-70 listed global small to mid-cap companies, with a mix of quality (approximately 40%), value (about 30%), transition (roughly 20%), and momentum (around 10%) businesses. A minimum of 50% of the fund's assets will be invested in securities identified for their sustainability characteristics.
"Quality" refers to companies with consistent earnings and favourable market structures. "Value" represents undervalued businesses with high cash flow potential. "Transition" includes companies undergoing turnarounds for potential gains, and "momentum" refers to cyclical companies in an upward industry earnings cycle.
James Abela, portfolio manager, said: “The relative lack of research on mid-caps and small-caps increases the likelihood that high-quality businesses with tremendous growth potential are flying under the radar and trading at attractive valuations.”
Dennis Pellerito, head of UK wholesale, Fidelity International, added: “Research plays a vital role in finding companies in their earlier stages of growth, which is why it’s important to choose a fund manager with the global reach to find market inefficiencies and help inform investment decisions.”
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