In a Fidelity MoneyBuilder Income Fund update, the investment manager has revealed that a number of its fund have outperformed cash. Amongst the funds to outperform cash include the MoneyBuilder Income Fund as well as the Fidelity Emerging Markets Fund over the past ten and five years respectively.
Tom Stevenson, Investment Director, Fidelity Worldwide Investment, comments: “During times of market uncertainty investors look to perceived ‘safe havens’ such as cash. Everyone’s attitude to risk differs, but those with a medium- to long-term investment time horizon should be considering stocks and shares in order to benefit from the superior returns offered by equity and fixed income markets and to protect their savings against the impact of inflation. While cash may feel like the safest option, interest rates are likely to remain low and will offer very little opportunity for savers to grow their hard earned money or to maintain its purchasing power.”
Data from Fidelity Worldwide Investment shows how much extra a saver would have achieved over cash on an annualised basis if they had invested in a selection of Fidelity funds:
| Fidelity MoneyBuilder Index | Fidelity MoneyBuilder Income | Fidelity Emerging Markets | |
| 5 years | +2.4% | +7.8% | +3.2% |
| 10 years | +7.6% | +5.8% | +13.9% |
Tom Stevenson continues: “The world economy continues to go through a tough time and markets are likely to remain volatile, so the flight to safety is understandable. However, in an environment of low growth and low interest rates, hiding in the illusory safety of cash could itself be a significant risk. Accepting the inevitable ups and downs of equity and bond markets, investors can benefit from the long term outperformance of shares and bonds while still reduce the risks of investing with a few simple measures.
“For example, saving small amounts on a regular basis can help to combat the natural tendency of investors to sell when markets are low and buy when they are high. Diversification is also important; bonds and equities can move in different directions and owning a balanced portfolio can smooth returns.”
