67 WALL STREET, New York - March 18, 2014 - The Wall Street Transcript has just published its current Investing Strategies Report. This special feature contains expert industry commentary through in-depth interviews with highly experienced Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Secular Growth Themes - Small Cap Investing - Upside in Small-Cap Stocks - Value Investment - Balanced Investment Approach - Global Growth Equities - All-Cap Investing - Value and Growth Investing
Companies include: Google Inc. (GOOG), CBS Corporation (CBS), Biogen Idec Inc. (BIIB), Amgen Inc. (AMGN), Gilead Sciences Inc. (GILD), ACADIA Pharmaceuticals, Inc. (ACAD), Neurocrine Biosciences Inc. (NBIX) and many others.
In the following excerpt from the Investing Strategies Report, an experienced portfolio manager from Fidelity discusses his investing methodology and top long term stock picks for investors:
TWST: Could you give us an overview of the Fidelity Puritan Fund and its guiding principles?
Mr. Arani: The Puritan Fund is a balanced fund. Most balanced funds are pegged at a neutral allocation of 60% equities, 40% bonds. This fund is a bit different in that there is a high-yield component, so at a neutral allocation, the mix of assets would be 60% equities, 35% investment grade and 5% high yield. However, I have a fair amount of flexibility to overweight or underweight different asset classes where I see opportunities.
I manage the fund with an equity allocation of between 50% and 70% of total assets, depending on the investment environment I expect. For example, ever since the market low in the first half of 2009, we have been overweight equities. We were able to overweight equities when stock prices were severely depressed, which has been one source of additional outperformance. Also, we increased high-yield exposure in the fund to 10% of assets around the same extremely opportunistic time. The fund has been underweight investment-grade bonds with bond yields at near historic lows, which also has been a positive contributor to overall fund performance.
So in summary, the Fidelity Puritan Fund is a balanced fund with more flexibility than typical balanced funds. If you consider 60% equities being a neutral point, I'm happy to go plus or minus 10 percentage points to that neutral point. So if the opportunity is right, equity assets can be as high as 70% of the assets, which is where it is today, and what it has been for the better part of the last year. Or it can be as low as 50%, if we start to think equities are overvalued or less attractive, or we think we are going to enter a riskier environment.
TWST: Where do you think the market is headed as we move further into 2014? Where do we go from here?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.