Partner Insight: Three key reasons to consider Absolute Return Global Equity today

The Fidelity Absolute Return Global Equity Fund

The Fidelity Absolute Return Global Equity Fund is a market-neutral, long-short strategy, blending the highest conviction buy and sell ideas from Fidelity’s global analyst network with quantitative portfolio construction techniques. The fund aims to generate alpha while neutralising market beta, deriving returns from stock selection rather than broad market movements.

Importantly, the fund has the potential to outperform across a range of market environments, reducing reliance on the direction of equity markets.

As the name suggests, absolute return equity market-neutral strategies seek to generate returns in absolute terms, rather than relative to equity indexes or benchmarks. Ours is no different. The fund’s dissimilar performance profile relative to traditional asset classes means it can act as a useful diversifier in broader portfolios with inherent correlation risk.

The benefits are clear: allocating to well managed absolute return strategies within a broader portfolio can improve risk-adjusted returns over the long term. The Fidelity Absolute Return Global Equity Fund can therefore support portfolio resilience and contribute to favourable long-term performance outcomes.

Source: Fidelity International, to 30 June 2026. All returns are in USD using Fidelity International’s 10-year capital market assumptions and standard hedge fund assumptions (excess return of 3%, 6% volatility and 0.2 correlation with other asset classes). Reference to returns are gross of fees.

Fidelity’s proprietary research is the beating heart of the capability, and the engine that ultimately drives performance outcomes. The Fidelity Absolute Return Global Equity Fund is arguably the purest play on our fundamental research insights, leveraging the highest conviction ideas on both the long and short side from our global analyst network – an alpha source that cannot easily be replicated in the industry.

The strategy holds long positions in our analysts’ most highly rated stocks, and short positions in the worst rated stocks that are expected to fall in value, or at least lag their regional market. Essentially, we are looking to capture the spread in return between winners and losers, regardless of prevailing market conditions.

Crucially, Fidelity’s research teams have consistently demonstrated genuine skill. The breadth and depth of our global research platform enable us to separate signal from noise and uncover nuances that others miss. These insights feed directly through to fund performance.

Source: Fidelity International. Data as at 30 June 2026. Regional returns weighted by market cap of companies rated either buy or sell. Value add calculated vs. regional indices. Data calculated using Analyst Rating Metrics (“ARM”) System running on Arithmetic ARM model. Chart includes returns for FCAM and Canada since Sept 2020.

Capital Preservation Across Market Cycles

Considering the difficulty of recovering losses and the focus on delivering positive returns across the full market cycle, it is critical that absolute return strategies avoid sizeable drawdowns during periods of market volatility.

Pleasingly, our research engine and disciplined, repeatable portfolio construction methodology have combined as anticipated, working in harmony to achieve stated objectives. We have managed a SICAV version of the Absolute Return Global Equity strategy for six years: as shown in Chart 3, drawdowns have been much lower than broader global equities during that time. This has helped preserve capital and smooth the performance profile over time, as well as contributing to top-quartile performance versus peers over three and five years.

Source: Morningstar Direct. FF – Absolute Return Global Equity Fund W-PF-ACC-GBP and MSCI ACWI Index. Basis: nav-nav, gross income reinvested in GBP since inception (24 September 2020) to 30/06/2026, net of annual fees (excluding initial charge, if applicable). Past performance is not a reliable indicator of future results. For funds that invest in overseas markets, changes in currency exchange rates may affect the value of an investment. 

The fund’s very low beta profile means it is expected to provide some ballast in broader portfolios during periods of market turmoil: this could be particularly valuable if risk appetite turns and equity markets start to weaken.