A vehicle for event-driven investing

Fidelity manager seeks "mispriced" U.S. small- and mid-cap stocks.

Rudy Luukko 20 November, 2014 | 11:00PM

Restructurings, mergers and acquisitions, stock-index deletions and other company-specific catalysts drive the stock picks of Arvind Navaratnam, the portfolio manager of Fidelity Event Driven Opportunities.

Formally launched today, the new offering invests in U.S. stocks that the Boston-based Navaratnam believes are temporarily mispriced. This could be because of a positive development that he hopes to recognize quickly, and before the stock goes up. Alternatively, it could be a negative development, such as a dividend cut, that results in a stock price falling by more than what he believes is warranted by the company's fundamentals.

The fund focuses on small- and mid-cap stocks, which are less widely followed by the analyst community and therefore are more likely to be mispriced when a material event occurs. The fund does not engage in short-selling.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Aptiv PLC90.07 USD-1.12
Civeo Corp1.44 USD-1.37
Office Depot Inc2.55 USD-4.85
R.R.Donnelley & Sons Co2.53 USD-3.07

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.