Fidelity has announced the launch of its Multi Asset Navigator Fund in Hong Kong and has appointed Trevor Greetham as its portfolio manager. Up until 2006, Greetham had been director of asset allocation at Merrill Lynch.

The fund will cover a range of assets, namely: global stocks, bonds, US dollar cash, global real-estate shares and physical commodities. Median weightings have been set out for each category, and the plan is to tweak these weightings, increasing or decreasing them by 10%, depending on prevailing market conditions.

The fund began trading in May this year, but Fidelity is unwilling to reveal how it has performed in this period prior to the public launch. Currently, the fund is overweight stocks and commodities by 6% apiece, and underweight in the other three categories. This is because the Fidelity portfolio managers like the look of anything related to global growth, such as emerging market equities, energy and metals.

Fidelity believes that correlations between asset classes have never been so low, describing the current environment as a ægolden ageÆ of low correlation. So it aims to profit by arbitraging between asset classes.

ôThe global story is growth,ö says Greetham. ôWe have had an earnings driven bull market, not one caused by price/earnings re-ratings. Consequently, I donÆt think stocks are likely to collapse, but I am not so optimistic about interest rate sensitive stocks, such as financials and consumer companies.ö

However, he says he won't manage the fund on the basis of future prognostications. He says he allocates and re-balances the assets based on whatever information lands on his desk each day. He likes to call it ônow-castingö.

The fund aims to beat its compound benchmarks by 1.5% per year, but with a subscription fee of 5.25% and annual fees of 1.25%, it may be some time before investors see a positive return over benchmark on their investment.