FidelityNow: Darren Lekkerkerker’s 2026 market outlook

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Hi, I'm Darren Lekkerkerker, Fidelity Portfolio Manager.

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I'm excited to be here. I'm positive heading into markets into 2026.

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Last year in 2025, we ended the year with a

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stable and low economic growth, double-digit earnings growth, and positive

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markets. I think into 2026, I see a lot of these trends

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continuing in terms of the economy.

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We see both monetary support in terms of like lower

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rates in terms of both sides of the border in the U.S. and Canada,

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and fiscal stimulus in the U.S., which should support both consumers and

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businesses, lower gasoline prices, which help consumers.

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So a lot of positive trends.

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Last year, we saw a transition from the market being led by

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technology and the AI beneficiaries

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to broader market, where we're seeing early cyclical sectors do well,

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such as consumer discretionary, financials, industrials.

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Also resources,

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these are a lot of areas that I continue to like for a

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positive investment into 2026.

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For the Fidelity American Equity Fund, I will manage the fund

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in a materially similar way to I have managed Fidelity North American Equity

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Fund over the last 10 years.

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My plan is to achieve

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above average, absolute and relative fund performance.

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In terms of what I'm looking for, I look for high quality businesses,

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I plan to have a concentrated portfolio of these companies and

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I'm looking for three things when I evaluate a business.

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One, what's the quality of the business franchise?

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Does it have a competitive advantage that's durable?

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Can we evaluate this through high return on invested capital or rising return on invested capitol?

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Two, management. We interview all of the management teams

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before and regularly during our investment period.

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Does management have a lot of skin in the game? Do they own a lot stock?

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Do they act and care about the same things as us as shareholders?

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Two, what do they do in terms of capital allocation?

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Can we expect their capital allocation to be accretive to us as shareholder over time?

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And three, do they have a track record of execution?

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Thirdly, I look at valuation. Is now the right time to own this company?

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What's the free cashflow yield

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and how do we think that will trend over time?

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For more information on Fidelity American Equity Fund

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and the other funds I manage, go to fidelity.ca under Fund Facts.