Julian Manduca
A new and innovative investment opportunity that envisages target dates was launched Tuesday at the Westin Dragonara.
Fidelity Investments has launched three Euro-denominated funds following the success of similar schemes in the US and UK.
The novelty is in the introduction of three target dates – 2010, 2015 and 2010 – which investors can select depending on their individual goals.
The funds will be attractive to people with definite financial goals, for example retirement planning, a large wedding or the funding of a child’s education.
The money invested can be redeemed at any time and investors will have the flexibility to switch to another target fund at any stage.
One of the funds most important features is that the structures will change over their set time periods, with the focus on delivering capital growth in the early years and shifting to preserving capital - and therefore reducing risk - as the fund nears its target date.
Speaking to our sister paper, The Malta Financial and Business Times, Steven Kowal, associate director of Fidelity Investments International Business development unit said the funds were a “prudent investment, in the sense that the investor can sleep better at night knowing his or her money is in the hands of a competent asset manager.”
The target funds are managed by Richard Skelt, who is manager of the award winning Fidelity Funds, and who currently manages US$ 9.05 billion in asset allocation products.
Asked whether the target funds could be described as cautious, Kowal said that while he understood that many Maltese were cautious and conservative investors, that did not always work out well as over the years a small return would be wiped out by inflation and reduces purchasing power.
Addressing an audience that gathered for breakfast Tuesday, Kowal said: “We believe that given the performance of the stockmarket over the last few years, investors should be looking for a total investment solution which closely aligns itself with their lifetime goals and where volatility and risk are managed on a continuous basis.
“Investors do not have to make any portfolio changes themselves, they will simply reap the benefit of being invested in a fully diversified portfolio with their money spread across the globe managed by a number of Fidelity’s pre-eminent investment professionals.”
When the investments reach their target date, investors can choose to either redeem their holdings to put towards their goal; continue to hold their investment within the target fund or switch to another fund such as an income fund.
Kowal explained how for example an investor with more than six years to go before the target date could expect to be invested for growth primarily in equities, whilst an investor with less than three years to go before their target date would be invested heavily in a mixture of bonds and cash.
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