A New Hedged Equity Fund is Launched by Fidelity Investments

Fidelity Investments has added the Fidelity Hedged Equity Fund (FEQHX) to its portfolio of alternative investments (alts), the company said today. The new fund aims to build an equity portfolio with risk-return characteristics similar to those of the S&P 500 Index with downside protection that, depending on market conditions, could serve as a portfolio’s primary holding.

Financial Advisory Teams Will Be Included in the Fidelity Investments Hedge Equity Fund

The Fidelity Macro Opportunities Fund (FAQAX) and Fidelity Risk Parity Fund (FAPSX), which were just recently introduced for financial advisors, are now available to retail investors. The three alternative funds are presently available for commission-free purchase by individual investors and advisors through Fidelity’s online brokerage platforms.

The funds are managed by the investment adviser Fidelity Diversifying Solutions LLC*, which was established to support the development of alternative products and solutions as well as the extension of Fidelity’s alternative investing capabilities. In place of more traditional mutual funds, the funds will seek to diversify exposures to portfolios of more traditional asset classes. To do this, they frequently employ more complex investment and trading strategies.

Market volatility events often consist of two distinct phases: the initial decline and the subsequent recovery. A defensive equities strategy that aims to limit the effects of a market drop and take part as much as possible in the market recovery is the recently launched Fidelity Hedged Equities Fund. Fidelity Hedged Equity Fund’s “always on,” long-only, diversified put protection overlay approach aims to provide downside protection in specific market circumstances without sacrificing upside participation.