Big wins, big downside: How Fidelity is avoiding risk but still looking for winners

Please note this interview was filmed on 2 June 2026. 

Those hoping for a reprieve from the ongoing chaos of markets and macro may need to wait a little longer. 

At least that's the view of Fidelity International's Matt Jones, Portfolio Manager of the Fidelity Research Global Equities Fund, who says investors need to keep their wits about them if they want to successfully navigate the current market. 

"The volatility and the rotations that we've seen in the last 12-to-18 months, especially from things like the war and changing rates and inflation cycles, I think those huge rotations are going to continue."

In this interview, Jones explains how Fidelity is looking to position in a market that feels increasingly on a knife-edge, why valuation matters above all, and some of the stocks that exemplify that value-first approach. 

Pain and gain

In a global equities market still rife with valuation distortions and top-heavy stock and sector concentrations, macro externalities are piling on more risk and leaving investors in a precarious position. 

"If you're worried about extreme valuations, concentration in tech names or tech-focused names - you can play that game and you can take some big runs and some big wins there," says Jones. "But if you're thinking that's going to rotate and if you think that's going to turn against you, you'll take the pain on that downside."

In light of those current conditions, Fidelity is looking to avoid over-exposures in areas where the market could turn against you. "What we're trying to do with our Fund is to really tighten up and focus more on risk in this environment more so than alpha," says Jones. 

"The way we position the Fund to navigate these kind of things is not to take any big bets in any one of those directions. From a beta point of view, we keep our beta very close to one."

"If the market does take a huge dive, we're not geared into that in any way. I think having a well-diversified portfolio where you make sure there's no big exposures, it's going to be easy to navigate some of those rotations."

Finding alpha elsewhere

Part of navigating an overextended market is striking the right balance between exposure and risk, says Jones, especially for a global fund looking to keep pace with an especially broad index. 

"We can look like the benchmark without owning the benchmark names."

The most obvious example is in the AI trade, where certain big names have led the charge but where slightly lesser-known names offered similar upside at better valuations. 

"We've owned Nvidia over a lot of the last three-to-five years in the Fund, but you could get exposure looking like Nvidia from some emerging market names like Taiwan Semiconductors and Samsung Electronics."

"From a valuation point of view, you could get that exposure to Nvidia at a much cheaper price with a lot more upside up until maybe more recently from some of those Asian semiconductor names."

And these stocks are also reshaping how the market should view emerging markets, says Jones. 

"They give you that categorised emerging markets exposure from a classification point of view, but from a revenue point of view and a revenue exposure and a risk point of view, they're not like you're fishing in a really illiquid volatile country with limited upside."

A few years ago, the US was still offering those types of opportunities, but these days investors need to cast a wider net. It's about finding global names that aren't necessarily household names but are offering the kind of fundamental values Fidelity is looking for.

"Over the last couple of years, we've seen valuations start to dissipate, stocks getting more expensive in the US and a lot less high conviction ideas out there. So our process has naturally drifted to the rest of the world looking for that optimal risk-reward trade off."

The stocks on the right side of the risk/reward equation 

One example is the US-listed, but Finnish-founded, Amer Sports (NYSE: AS), which owns sport brands like Wilson, Salomon and Arc'teryx. 

"Our analyst sees that global exposure from a Finnish company - the potential upside, the margins and the growth in opportunities there and the valuations are quite cheap," says Jones. 

"It's a classic example of what I love about this process. It's not dictated by a fixed categorisation of where the company's registered."

Another example is French bank BNP Paribas (EPA: BNP), which offers financials exposure at a better price than that offered by the US (or Australian) banks right now.

"These are good quality companies that will provide growth into the future."

Closer to home, Fidelity is looking for ASX companies offering truly global, diversified exposure. One contrarian name here is James Hardie (ASX: JHX), where its growth and revenue exposure sits outside Australia.

"It's another one of those 'growth but at a cheap price' plays that we're looking for."

Jones says one stock fitting that description but that the market may be missing is Motorola (NASDAQ: MSI), which offers diversified revenues across defence and healthcare, strong growth potential, and importantly, differentiation to the rest of the market. 

"You look at the upside and the potential of the stock, and how diversified and uncorrelated is to the entire sector."

Picking from a cast of thousands

The Fidelity Research Global Equities Fund is built on high-conviction stock picking. No easy feat when it has an investable universe of more than 2,000 stocks that its team of global analysts cover.

Narrowing that down to a portfolio of 60 to 80 stocks requires taking the fundamental analysis performed by the research team and combining it with other metrics, like sentiment, earnings and the model portfolios of its analysts. But ultimately, what drives the decision is value and quality, says Jones.

"We're looking for internal conviction from Fidelity, we're looking for external conviction from the street with some reinforcement and earnings, but reaffirming all of that, that we're not overpaying for this with valuations."

That ultimate emphasis on valuation is especially relevant at a time when valuations have become another obvious risk. But stretched valuations work in both directions, and big runners can free up capital to put back into areas of the market offering better growth. 

"We're increasingly being more focused on taking profits at the moment and recycling those back into essentially cheaper names that haven't run as hard and are a bit less exposed to this tech supercycle."

And a risk-conscious approach right now doesn't necessarily mean giving up on returns, says Jones. 

"The way I look at the world and the way we look at investing in a global fund, it is definitely a risk/reward trade-off. And there's a lot of risk in some of these companies, but there's some big ones where there is limited risk and the valuations are a lot cheaper and the upside and huge potential is there."

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