The Upside: Fund in focus – Patrice Quirion’s contrarian global strategies

[00:01:29] Helen Pang: Hello, and welcome to the Upside's fund focus. I'm Helen Pang. I am here today with Madeline Kaminski. Maddie is an investment associate who covers the Fidelity International Concentrated Equity Fund. Hi Maddie.

[00:01:41] Madeline Kaminski: Hi Helen, thank you for having me.

[00:01:43] Helen Pang: The fund we'll be looking into today is the Fidelity International Concentrated Equity Fund managed by portfolio manager Patrice Quirion. Patrice is the global equities portfolio manager here at Fidelity, also managing the Fidelity Global Concentrated Equity Fund, Fidelity Global Fund, Fidelity Global Equity Private Pool and Fidelity International Equity Private Pool. Maddie, you are an expert on these strategies, could you please walk us through the differences across each one?

[00:02:10] Madeline Kaminski: Absolutely. While Patrice employs the same investment approach across all three of his mandates there are a few distinct differences that set each fund apart. The main differentiator between the global and international funds lies within their geographical mix. In the global funds Patrice is able to own companies across the globe whereas in the international fund the focus is on investing in companies located outside of the U.S.

[00:02:34] Helen Pang: Let's give a bit more background on who Patrice is as a manager. He has been in the industry for 20 years and his contrarian investment style targets quality at a reasonable price. Could you please explain what that means?

[00:02:48] Madeline Kaminski: That's a great question. Contrarian investing can be described as making investment decisions that go against the prevailing market sentiment. Patrice employs this approach as a portfolio manager often seeking out of favour opportunities in which short term issues don't compromise the company's long term outlook. In these situations  Patrice looks for opportunities where normalization could lead to significant upside, emphasizing a belief in mean reversion of investor sentiment over time. Following this Patrice targets predictable, durable and growing businesses that can compound over time and may be mispriced by the current market.

[00:03:26] Patrice Quirion: Was hard to tell exactly when it turns but when it turns I want to be there before it turns. I try to preposition the portfolios trying to take advantage of those exaggerations that the market creates. There was a lot of that last year. I still think there's a fair bit of that today, less extreme. I think Europe is looking less mispriced than it was, to be fair. I still think it's more compelling in a lot of cases. Lining up a U.S. multinational versus a European multinational, the European stocks tend to still trade at a discount. Again, we're still lower in that cycle but it's not as extreme of a divergence as we had last year.

[00:04:08] Madeline Kaminski: A good example of his contrarian investment style in practice can be seen through his decision to bet against the U.S. market over the past couple of years. In Patrice's opinion U.S. markets had become less conducive to finding opportunities at reasonable prices with attractive growth prospects causing him to underweight the U.S. in his global funds in favour of more attractive opportunities internationally. This exemplifies his contrarian investment style as over the past couple of years the notion of U.S. exceptionalism caused many investors to overweight their allocation to the region whereas he went against broader sentiment by focusing instead on international markets.

[00:04:47] Patrice Quirion: I think we might be, I can't guarantee it, but it appears we might be at that inflection point where that decade of U.S. exceptionalism is looking peakish. I think you need to be selective. I think there are loads of opportunities. Those markets are not overpriced in aggregate, fundamentals have the potential to get better, capital has the potential to continue to flow back so yes, I am optimistic on a relative basis on international markets more so than North America. Then I think we'll need to, again, depending on your time horizon, but I think we need to ask ourselves is there too much concentration in that narrow part of the market that becomes at risk, especially like on the AI hardware, infrastructure build. That is a lot of market cap that has a lot of correlation with meme stocks, with cryptocurrencies, with everything that the retail investor typically touches. If it unfolds all of that unfolds and there's no valuation support anywhere in sight. I think the international benefit is not only to capture potential opportunities but I think also plays a role in potentially protecting you against what I think will be an eventual reversal of that melt-up that we've seen.

[00:06:13] Helen Pang: Patrice's strong stock picking and contrarian investment style has allowed his fund to perform strongly amid market volatility in the beginning months of 2025 and excel through the recent market recovery period outperforming both the broader global and international equity markets. Fidelity International Concentrated Equity Fund Series F returned 25% over the year-to-date period ending August 30th, 2025, delivering an excess return of 8.9% in comparison to the benchmark and beating 98% of peers in the international equity Morningstar category. Maddie, can you please walk us through how Patrice has been able to achieve these strong returns in comparison to the broader markets?

[00:06:53] Madeline Kaminski: It's no secret that international markets have been the focus for investing in 2025. Patrice has been a strong advocate for the case for investing internationally long before the market inflection we saw earlier this year. His contrarian investment style led him to position the fund into areas where the broader markets weren't present allowing him to capture significant upside in comparison to his benchmark when markets turned over the year-to-date period. The fund's investments in an overweight exposure to Europe was a strong contributor to the fund's outperformance, as was its investments in the consumer discretionary sector.

[00:07:28] Patrice Quirion: I think we need to be nimble and try to take advantage of some of the big moves and readjust our weight. In April what we've seen with Liberation Day and the big tariff shock it may come as a surprise to a lot of people, but not truly a surprise when you understand how the market works, the stocks that came down the most during that week, more or less, are not the companies that were exposed to tariffs the most. The stocks that came down the most were the most crowded long positions.

[00:08:00] Helen Pang: Patrice filters the investment universe of over 50,000 stocks to a concentrated portfolio of just 40 to 80 companies that fit within his proven investment selection process. The fund has broad investment parameters to allow for significant portfolio flexibility. Can you please give us a clear view of how Fidelity International Concentrated Equity Fund differs from its benchmark?

[00:08:22] Madeline Kaminski: Patrice follows a bottom-up approach in selecting investment opportunities for the fund which often leads him into areas of the market that may be overlooked. When you look at how the fund is positioned against its benchmark it's clear to see it differs quite significantly across each sector. A good example of this would be the fund's overweight to the consumer discretionary sector. Companies operating within the Chinese consumer discretionary space are an area of strong conviction for Patrice in the portfolio. In his opinion the emergence of Chinese multinationals will bring competition into the global landscape going toe-to-toe with their U.S. competitors for market leadership. Chinese multinationals will be able to compete on cost  offering comparable quality to their U.S. counterparts at a lower price point.

[00:09:07] Patrice Quirion: I like to bring everything into a framework where most patterns will follow some sort of cycle. There are short cycles and there are long cycles. The short ones everyone's paying attention to. The long ones are easy to get overlooked or to get confused with a secular trend as opposed to a cycle. What I've been talking about for over a year now, well over a year, is that I think we are getting to this point where the U.S. economy, its consumer, its fiscal spending, its corporate spending is starting to look somewhere close to the peak of its cycle. Those long cycles last a long time. As a result it's hard to have the perfect timing on exactly when that changes but I think this is the picture. what's interesting is you look elsewhere, you look in Europe and especially you look in China, you can start looking at same main economic players. The consumer, the fiscal side, the government and the enterprise or the corporate sector are all closer to a bottom, or maybe a little bit more like mid-cycle in Europe, those eventually revert.

[00:10:25] Helen Pang: That's all for today's show. Please follow us on our socials including Instagram, YouTube, LinkedIn, Facebook and Reddit for more great content and the latest financial updates. You can also head to fidelity.ca's investor education section to check out our articles, sign up for The Upside newsletter, get information about upcoming live webcasts and on-demand videos. Whether you're learning investment basics or looking for more advanced knowledge we can help you become a more informed investor. As always, working with a financial advisor is among the best investments you can make. Thanks for watching and I hope you'll join us again on The Upside.