A diversified and concentrated portfolio of 20-40 Australian high-quality stocks
Uses a bottom-up research approach to invest in companies with a sustainable competitive advantage, strong pricing market power, supportive industry structure, and strong management quality.
Strong risk management is at the core of our investment approach
A 'best ideas' concentrated portfolio, with a strong focus on risk management
A diversified Active ETF of some of Australia's most promising companies
One trade gives you access to our 20+ years' expertise investing in the Australian market
Casey McLean, Portfolio Manager of the Fidelity Australian High Conviction Fund talks about how he became interested in investing and what excites him about managing a concentrated portfolio of Australian stocks.
Portfolio Manager, Casey McLean, talks about what the Fidelity Australian High Conviction Fund offers investors and explains his investment philosophy and process.
EDITED TRANSCRIPT
During the quarter, the market had a weak period. It was down by almost 4% and the two key drivers of that were firstly, the weak reporting season in February. It was actually one of the most volatile reporting seasons on record. We saw that about 16% of the companies that did report had their share price move by plus or minus 10% on the day of the results.
The second factor was just the increased uncertainty in the global macroeconomic environment with the Trump administration trying to implement their policies. So that meant that the best performing sectors were in the industrials, financials and communication services, whereas the worst performers were the tech, energy and property sectors.
The Fund underperformed during the quarter and the key driver was some stock specific surprises that hit the portfolio. Broadly they can be grouped into a few categories.
Firstly, there was some poor corporate governance with Wisetech and PolyNovo having some disruptions there. Secondly, we saw poor capital allocation with the likes of James Hardie acquiring the U.S. building materials company Azek. Finally, we saw Goodman Group do a large equity raise which came at a discount as well.
The common theme here is, these are all very high-quality businesses with strong growth opportunities but some of these surprises were hard to see coming and we continue to like their outlook going forward.
On the flip side, the positive contributors during the quarter were gold miners such as De Grey Mining, where the gold price is benefiting from the uncertainty in the global environment. Also, Ventia, which is an urban services company operating in Australia.
They delivered strong results and also strong guidance as well. Also, Collins Foods; they're the operator of KFC restaurants in Australia where they're seeing growth start to accelerate again. They’ve help to offset some of those weaknesses in stock specific names.
I think the outlook going forward is going to remain very volatile and very uncertain.
And the key driver is going to be the global tariff regime that the Trump administration is implementing. And the on again, off again nature of that is just causing uncertainty and increased volatility in markets.
So, what does it mean? I think from a structural point of view, it means that the equity risk premium in the market is going to have to go up to account for the higher risk and uncertainty, and that means that valuation multiples are going to be structurally lower going forward. But at the same time there is opportunities presenting out of this and we're taking more of a balanced approach in the portfolio and trying to measure up opportunities for growth, as well as opportunities to hedge some risks that we see in the global environment.
Join Portfolio Manager Casey McLean as he provides an update on Aussie markets post the announcement of global interest rate changes and looks at the main contributors and detractors to performance for the quarter.
See for yourself how the fund has performed since inception. The chart below represents the value now of $10,000 invested in the Fidelity Australian High Conviction Fund in May 2024 compared with $10,000 invested in the S&P/ ASX 200 Accumulation Index.
Chart as at: 31 March 2025
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: S&P ASX 200 Accumulation Index.
Net returns as at 31 March 2025
| Timeframe | 1 mth % |
3 mth % |
6 mth % |
Since inception (29/05/24) % pa |
|---|---|---|---|---|
| Fund | -5.93 | -7.29 | -10.01 | -0.32 |
| Benchmark | -3.39 | -2.80 | -3.57 | 5.48 |
| Active return | -2.54 | -4.49 | -6.44 | -5.80 |
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: S&P ASX 200 Accumulation Index.
Net as at 31 March 2025
| 1 mth % |
3 mth % |
6 mth % |
Since inception (29/05/24) % pa |
|
|---|---|---|---|---|
| Total return | -5.93 | -7.29 | -10.01 | -0.32 |
| Growth | -5.93 | -8.15 | -11.18 | -12.52 |
| Income | - | 0.86 | 1.17 | 12.19 |
Growth return is the unit price movement on exit to exit basis. Income is expressed as Total Return less growth component.
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: S&P ASX 200 Accumulation Index.
| Distribution | Distribution (CPU) | Reinvestment price |
|---|---|---|
| 31-Mar-25 | 2.7534 | $8.7957 |
CPU = cents per unit. The above cash CPU excludes imputation credits and foreign income tax offsets which are non-cash components and are reported in the end of year tax statement. If the Distribution CPU column is 0.0000 it means that nothing was distributed.
As at 31 March 2025
As at 31 March 2025
| % total net assets | |
|---|---|
| NATIONAL AUSTRALIA BANK LTD | 9.9% |
| BHP GROUP LTD | 8.4% |
| COMMONWEALTH BANK AUSTRALIA | 7.7% |
| MACQUARIE GROUP LTD | 6.0% |
| ARISTOCRAT LEISURE LTD | 5.6% |
| QBE INS GROUP LTD | 5.2% |
| GOODMAN GROUP | 4.8% |
| ORICA LTD | 4.1% |
| DE GREY MINING LTD | 3.3% |
| JAMES HARDIE INDUSTRIES PLC | 2.9% |
As at 31 March 2025
| Fund % | Benchmark % | Relative % | |
|---|---|---|---|
| NATIONAL AUSTRALIA BANK LTD | 9.9 | 4.4 | 5.5 |
| ARISTOCRAT LEISURE LTD | 5.6 | 1.7 | 3.9 |
| QBE INS GROUP LTD | 5.2 | 1.4 | 3.8 |
| ORICA LTD | 4.1 | 0.4 | 3.7 |
| DE GREY MINING LTD | 3.3 | 0.2 | 3.2 |
As at 31 March 2025
| Fund % | Benchmark % | Relative % | |
|---|---|---|---|
| WESTPAC BANKING CORP | 0.0 | 4.6 | -4.6 |
| ANZ GROUP HOLDINGS LTD | 0.0 | 3.7 | -3.7 |
| WESFARMERS LTD | 0.0 | 3.5 | -3.5 |
| CSL LTD | 2.0 | 5.1 | -3.1 |
| COMMONWEALTH BANK AUSTRALIA | 7.7 | 10.7 | -3.0 |
This Fund is subject to the risk of stock market fluctuations. Investors accessing the Fund through a master trust or wrap account will also bear any fees charged by the operator of such master trust or wrap account. Any apparent discrepancies in the numbers are due to rounding.
1 An intraday optimised portfolio value (IOPV) for each fund will be published throughout the ASX trading day. The IOPVs are calculated by ICE Data Indices, LLC based on the latest price of each security, amongst other factors. In equity constituent market value calculations, the last reported trade price from the composite feed (US) or primary listing exchange (non-US) is used for the latest price of each security, when those exchanges are open. When those exchanges are closed, the IOPV calculation can incorporate the Real-Time Fair Value Information Service from ICE Data Pricing & Reference Data, LLC which is a multi-factor model that calculates a real-time estimate of the price that would likely prevail in a liquid market for an equity security following the close of the local market. For more information on Fair Value Information Service methodology, please refer to: https://www.theice.com/market-data/pricing-and-evaluations/fair-value.
For IOPVs with fixed income securities, ICE Data Pricing & Reference Data, LLC’s Continuous Evaluated Pricing (CEP) service can be used to price such fixed income securities. As market data becomes available and passes internal system tolerances and parameters, CEP will update throughout the day. While updates to CEP occur more frequently during local market trading hours, CEP will update outside of normal trading hours based on market information that is available at that time. For constituents where CEP is not available, either the prior day’s evaluation or a client-provided price may be used in the IOPV calculation instead. For more information about Continuous Evaluated Pricing, please refer to: https://www.theice.com/market-data/pricing-and-evaluations/cep.
The iNAV calculations as shown (the “Data”) and provided by ICE Data Indices, LLC are updated during ASX trading hours. Powered by Factset. iNAV calculations are indicative and for reference purposes only.
The Fund is not sponsored, endorsed, sold or marketed by ICE Data Indices, LLC, its affiliates (“ICE Data”) or their respective Third Party Suppliers.
ICE DATA OR ITS THIRD PARTY SUPPLIERS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE IOPVS, ETF STATISTICS, FUND OR ANY FUND DATA INCLUDED THEREIN. IN NO EVENT SHALL ICE DATA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
2Management costs and buy/sell spread are current as at the date of publication of this website. These fees may be subject to change in the future.
3Total returns (net) have been calculated using exit prices and take into account the applicable buy/sell spread and are net of Fidelity’s management costs, transactional and operational costs and assumes reinvestment of distributions. No allowance has been made for tax. Returns of more than one year are annualised. The return of capital is not guaranteed.
