As the cashier at your local food store slips your yogurt across the scanner, she mentions she just invested in an event driven hedge fund called Fidelity Special Situations Fund. You ask; “what is Fidelity Special Situations Fund?” The scanner registers your bag of oranges as she excitedly tells you …
What is Fidelity Special Situations Fund?
The Fidelity Special Situations Fund is an open-end, investment mutual fund. A mutual fund is an investment vehicle that pools investor capital and invests the funds into equities (stocks), fixed-income securities (bonds), residential and commercial real estate, and other asset classes.
An open-end mutual fund issues new shares and purchases redeemed investor shares, continuously. The advantage is the fund provides shareholders with liquidity for their holdings, however, the issuance of new shares is dilutive and the increase in assets can increase the fund’s fees. The cashier, now bagging your groceries, tells you these fund facts:
General Information – Fidelity Investments Canada, ULC has been fund and portfolio manager since its inception in 2007. As of September 2023, it has $3.44 billion in assets under management (AUM), requires a $500 minimum investment, makes annual shareholder disbursements, and has a total fund fee of 2.34%. The fund’s return on investment since inception is 13.61%, with a current share price of $44.91 (as of May 6, 2024).
The Fund’s Investments –This Canadian fund primarily invests in Canadian and foreign equity securities of small-to-medium companies. These special situations investments can be restructurings, liquidations, acquisitions, mergers, and destress assets and securities.
Asset Allocation – The fund’s asset mix is 51.4% Canadian equities, 46.8% foreign securities (includes the United States), and 1.9% convertible securities. The fund’s top four investment sectors are industrials 20%, information technology 18.1%, basic materials 13.4%, and communications 10.7%. The portfolio contains 174 investments including well recognized names like Nvidia, Meta Platform, and Shopify.
What is Fidelity Special Situations Fund? Fidelity Special Situations Fund is a mutual fund focused on undervalued, event driven-affected firms exhibiting strong growth potential for long-term market outperformance.
When did Fidelity Special Situations Split?
Fidelity Special Situations split in 2006. Legendary fund manager, Anthony Bolton, proposed splitting the $6.45 billion Fidelity Special Situations Fund into two separate funds. A new fund called Fidelity Global Special Situations Fund was created using $3.22 billion of the original funds’ assets, leaving the original Fidelity Special Situations Fund with $3.23 billion AUM.
Bolton thought the original fund had become hard to effectively manage, investment opportunities in the U.K. were increasingly difficult to find, and the larger global investment landscape was more fruitful.
What is Fidelity Special Situations Fund? Fidelity Special Situations Fund is the parent fund of Global Special Situations Fund. It’s slightly more volatile than the broader market with a 1.07 beta and considered a medium-to-higher risk investment.
What is the Fund Code for Fidelity Special Situations?
The fund codes for Fidelity Special Situations Series B shares are CAD (Canadian): 1298 and US (United States): 1299. Fund codes are the unique blend of letters and numbers used as fund identifiers of specific mutual funds and exchange traded funds (ETF) and provide standardized identification and facilitate ease-of-trading for these asset classes.
What is Fidelity Special Situations Fund? The fund is an investment vehicle created for global investment diversification with a long-term horizon. All investing is inherently risky and smart money always performs extensive due diligence to determine if the risks are identifiable, manageable, and survivable.
Read next: What is a Special Situation Fund?
