At first glance, it seems that the current context is not good for investing. Do you think the same?
At Fidelity, we believe that 2021 will continue to be a year of uncertainty and will mainly discuss 4 topics: the role that the authorities will play in the post-pandemic economic recovery; the increase in indebtedness of governments and companies; the valuations of listed companies, which in some cases are not justified by the growth of their profits; and the sustainability of investments or factors known as ESG (environmental, social and governance, for its acronym in English). Possibly 2021 will be the year in which the value of the diversification of our investments, by region and by asset class, is demonstrated. Many have been caught by the pandemic without exposure to Asia, but economies, as varied as China, Singapore, Japan, or South Korea, have managed to contain the spread of the virus, which will likely support the growth of your corporate profits with a higher level of sustainability. Therefore we think that there are attractive investment opportunities. Of course, provided that we invest very selectively, after a detailed analysis and with a medium and long-term time horizon, maintaining a diversified portfolio of securities and adjusted to the risk that each one can assume. If, in addition, our portfolio is related to any of the themes that can continue to benefit from the effects of the pandemic, through companies duly analyzed and with good prospects for sustainability and profit growth, much better.
What is Fidelity International?
It is an asset management company that provides investment solutions and services, as well as retirement expertise and experience, to more than 2.5 million clients globally. Since it is a privately owned company created more than 50 years ago, we think generationally and invest with a long-term vision. We operate in more than 25 countries and are responsible for a total volume of assets of about € 521.6 billion, of which approximately € 60 billion belong to the Asian region. We work with various types of clients: from central banks to sovereign wealth funds, large corporations, financial institutions, insurance companies and wealth managers, as well as individual investors. Supported by the fundamental and exhaustive analysis of each company in which we invest, We have the competitive advantage that generates the possibility of achieving higher than average returns for our clients. Our global analytics capacity is one of the largest in the industry, with more than 400 investment professionals and analysts around the world. Our mutual fund managers have access to our internal analysis, not available to third parties, which covers 90% of our fund positions.
Everything seems to indicate that China, despite the health crisis, will end 2020 positively. How is it possible?
At the beginning of the crisis in Europe and the US, when we were all confined, China was already getting going. In the middle of the year, and despite being more conservative than the market consensus in terms of Chinese GDP growth for 2020, we estimated that China would indeed end the year positively. The MSCI China index, at the end of October, had a cumulative return of 18.1% in euros, while the global MSCI ACWI index accumulated a return of -10.4%. At Fidelity, we believe that economic activity in China is already normalizing as a result of greater – and better – control of the spread of the virus.
What advice would you give someone who wants to invest?
That you seek advice to be able to know your investor profile, making a sincere exercise about your profitability objectives according to the level of risk that you can tolerate. If you are a long-term investor, my advice is not to focus on the short-term noise and look for investment topics related to big structural changes that remain in effect for the duration of your investor journey. I would also encourage you to keep your portfolio highly diversified and as uncorrelated as possible so that, as much as possible, you can protect yourself in times of a downturn in the markets.