Fidelity launches equity fund led by star U.S. manager Will Danoff

Rudy Luukko 26 January, 2017 | 6:00PM

Fidelity Investments Canada today launched Fidelity Insight Class, a global equity fund emphasizing U.S. stocks and managed by Will Danoff, one of the Fidelity organization's star managers in the United States. Danoff is best known for the US$105-billion Fidelity Contrafund, which he has managed since 1990.

Danoff's investment strategy is based on identifying companies that have the potential to deliver sustainable earnings growth, and whose value he believes is not fully recognized in the market. According to the prospectus, the new fund isn't constrained by investment style. It may invest in either growth or value securities.

Fidelity Contrafund currently has a Morningstar Analyst Rating of Silver in its peer group of U.S. large-cap growth funds, and a Morningstar Rating of 4-stars. In keeping with its massive size, the U.S.-domiciled fund has more than 300 holdings.

By contrast, the Danoff-led fund for Canadian investors will have far fewer names and much greater capacity to accumulate meaningful positions in small-cap stocks. "I'm going to put my best ideas in this product," Danoff told an audience in Toronto at a Fidelity event attended by an estimated 1,600 brokers and dealers.

As noted by Morningstar analyst Katie Rushkewicz Reichart in her report on Fidelity Contrafund, Danoff's competitive advantages include being able to draw on Fidelity's large global analyst team, and his direct contacts with companies. "As the biggest owner of many stocks, Danoff has unparalleled access to company management," the report said, adding that this helps him understand the growth drivers for businesses.

Danoff says his access to management has also enabled him to be an early investor in initial public offerings that have been lucrative for the fund. Among the IPOs he cited in his Toronto presentation were those of Google, now known as  Alphabet Inc. (GOOG);  Starbucks Corp. (SBUX); and  Facebook Inc. (FB).

Danoff joined Fidelity as an equity research analyst in 1986 after graduating from the Wharton School of the University of Pennsylvania. From 1989 to 1990 he was an assistant portfolio manager for Fidelity Magellan, which was then managed by Peter Lynch.

The management fee of Fidelity Insights Class is 2% for the deferred-sales-charge Series A, 1.85% for Series B which allows dealers to charge a front-end-load, and 0.85% for Series F for fee-based accounts. The same fee schedule applies to the currency-hedged version, Fidelity Insights Currency Neutral Class.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alphabet Inc Class C1,232.43 USD0.27
Facebook Inc A188.14 USD0.03
Starbucks Corp91.01 USD0.29

About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to Morningstar.ca on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.