Fidelity Multi Asset Navigator Fund

Fidelity Multi Asset Navigator Fund offers not only exposure to bonds, equities and cash, but also property and commodities to improve diversification and enhance performance. Consequently, this mutual fund is able to tap into an array of opportunities globally to which many other funds do not otherwise have access. Such a more diversified asset mix is suppose to reduce the overall risk of the portfolio without forgoing returns. An added draw of the fund is that the asset mix changes accordin to the stages of the global economic cycle. Investors need not perform fund swtiching and are able to hold onto the same fund throughout the cycle, potentially reducing the hassle and costs of investing.

The major asset allocation of this mutual fund is reviewed on a monthly basis but the fund manager is free to change the asset allocation on other days if circumstances dictate and rebalance the positions daily in order to manage cash flows.

The fund is expected to achieve asset reallocation gradually reflecting the slow movement of the economy from one phase to another. While economic models suggest four different portfolios depending on the phase of the economic cycle, the transition from one to the other will be achieved progressively rather than immediately.

This mutual fund is considered to be a low to medium risk investment based on the fact that it will have no less than 30% in bonds and cash at any time and that it also benefits from asset classes diversification. The asset mix will be adjusted to reflect the prevailing trading conditions and the Fund should therefore be more resilient to downside than pure equity-based funds. Investors will do well to note that such diversified funds also typically underperform pure equity-based funds in a bullish market.

It will do well to consider adding this mutual fund to a portfolio to gain added stability. For the more aggressive portfolio, this fund may not fit as well, potential limiting the upside achievable. It may be worthwhile to consider purchasing this fund as a defensive play when the global economic cycle has been expected to have peaked.