Fund uses integrated options overlay to minimize downside risk
To assist investors in navigating ongoing market volatility while pursuing growth, Fidelity Investments Canada ULC introduced the Fidelity SmartHedge U.S. Equity Fund.
According to Fidelity, the Fidelity SmartHedge U.S. Equity fund helps in minimizing downside risk while still allowing for upside participation through an options-based derivatives approach. It also uses an integrated options overlay to help lessen downside risk from declining stock prices.
The fund invests mostly in equity securities of some of the biggest American corporations in order to achieve long-term capital growth. It hedges market exposure using an options-based derivatives approach to reduce downside risk and increase upside participation.
"Our new Fidelity SmartHedge U.S. Equity Fund will aim to balance risk while offering potential for savings to grow, helping to support investor resiliency during challenging conditions," said Kelly Creelman, Senior Vice President, Products and Marketing, Fidelity.
Zach Dewhirst, Mitch Livstone, and Eric Granat will oversee the management of the fund.
Dewhirst, who has managed a wide range of stock portfolios over the past 10 years, serves as the team leader and portfolio manager for the quantitative equities research division.
Livstone is the chief investment officer of Arbitrage and Hedging Solutions, which creates and manages alternative investment strategies focused on defensive hedging techniques and relative value arbitrage methods.
Granat served as the portfolio manager responsible for several options-based pilot strategies, and is in charge of designing and implementing derivative-based products to improve portfolio performance and risk characteristics.
In response to client and advisor demand, Fidelity has also introduced a new target-date fund, the ClearPath 2065 Portfolio, a new target date fund. With a long-term investing strategy that is meant to become reduced risk over time and change to an emphasis on fixed income as the investor approaches retirement, products like Fidelity ClearPath 2065 Portfolio can benefit Canadians in planning for their retirement.
According to the 2022 Fidelity Retirement Report, Canadians who have a documented retirement plan feel more prepared for retirement than those who don't, in terms of their finances, social lives, physical health, and emotional well-being.
"Expanding investors' choice and access to diversified investment options is a key priority – including delivering products designed to help them stay invested amid volatile markets," Creelman said.
