While both of Fidelity's world allocation funds are measured against a 60/40 equity-to-fixed-income asset allocation benchmark, Fidelity takes two very different approaches in managing these funds.
Fidelity Global Balanced Fund
The Fidelity Global Balanced Fund seeks to add value over time by taking a two-pronged approach, with the portfolio manager making asset allocation decisions based on both top-down macroeconomic analysis and bottom-up fundamental security selection, with market specialists managing each sub-portfolio. The goal of this disciplined asset allocation approach is to minimize volatility as well as downside risk.
Fidelity Global Strategies Fund
The Fidelity Global Strategies Fund uses a disciplined approach to fund management, looking at secular, cyclical, and tactical inputs. Building and maintaining the portfolio involves three key steps:
Managers start by looking at secular, long-term trends such as industrialization in emerging markets, resource scarcity, and other issues that constitute "the new normal" in today's changing investing landscape. They also examine cyclical economic patterns, including economic growth or contraction, inflation, and the liquidity environment. Finally, they seek to identify tactical opportunities including short-term trends and specific markets or industries that may benefit from changes in momentum or investor sentiment.
Apply a risk management framework
The managers employ extensive risk assessments, including tail risk analysis, to develop multi-level scenarios and assign risk probabilities to each input.
Construct the portfolio
Based on their research and risk control process the managers make asset allocation decisions, investing across a diverse set of unaffiliated exchange-traded funds and actively managed Fidelity and Fidelity Advisor funds.