The three sectors Fidelity backs for value opps
Fidelity has identified three sectors that are attractively priced for investors looking to pick up blue-chip stocks at cheap prices following the COVID-19 fallout.
Many stocks had seen their share price decimated in recent weeks with some falling by as much as 40%-50%.
Fidelity Australian Equities fund manager Paul Taylor said this made it a great time for investors to pick stocks up cheaply.
“This is an opportunity to upgrade and buy those things which you have always wanted to own, so long as it has a good structural outlook then this is an opportunity. This is a real good opportunity to buy cheap stocks that will perform well over the next 5-10 years.”
He said resources, technology and travel all presented good options for investors looking for cheap stocks. Resources firm BHP Billiton fell 12% in one day and lost its position as the largest company in the ASX, replaced by biotech firm CSL.
“The market has come down [for resources] and they are looking attractively valued, they are cheap with strong balance sheets and good cashflow. Lots of projects are being cancelled or delayed so the balance sheets are in better than they would have been,” Taylor said.
“Technology has been hard hit and is linked to global growth. Travel has been the hardest-hit sector, we expect to see a lot more volatility in this sector for a longer period as consumers are holding off from booking trips or booking them much further ahead.”
The Fidelity Australian Equities fund lost 3.4% over one year to 12 March, according to FE Analytics, versus losses of 10.4% by its ASX 200 benchmark.
Performance of Fidelity Australian Equities fund versus ASX 200 over one year to 12 March
AUTHOR
Laura Dew
Recommended for you
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
