Equity market investing, long-term views from Fidelity’s Equity Co-Head

  • Pam Holding doesn’t focus on “short-term market moves,” instead emphasizing long-term investments.
  • Sectors exposed to ongoing trends include technology, healthcare and vehicle electrification.
  • Holding is also passionate about ESG investing as changing demographics reinforce this focus.

During Pam Holding’s 36-year career on Wall Street, she notices a few particularly interesting moments.

Her first memorable moment came in the late 1980s when she got a job at Franklin Templeton working on high-yield bonds — right in the middle of the spiraling leveraged buyout boom, funded by junk bonds and spurred by Drexel Burnham’s Michael Milken became.

A few years later, the high-yield market collapsed, Drexel Burnham went bankrupt, and Milken was sentenced to prison for securities fraud (he was pardoned by then-President Trump in 2020 for his role in cancer research).

In a recent interview with Insider, Holding said the latest moment of interest is right now, as market battles intensified


amid a Federal Reserve rate hike cycle and the Russia-Ukraine crisis — not to mention the ongoing COVID-19 pandemic and already stretched stock valuations in 2022.

corporate culture and mentoring

For Holding, who studied history at Princeton and wanted to be a lawyer, a career on Wall Street was not always in sight. But after trying out investment banking, she found that she enjoyed financial analysis more than she anticipated.

“Picking companies, researching industries and trends, looking into the past to predict the future — that’s a lot of what I did as a history student,” she said.

But while she enjoyed the job, Holding wasn’t a big fan of the culture — particularly that she didn’t have lifetime ownership of her work, instead having to constantly relinquish one deal to move on to the next.

After two years she moved to the high yield desk at Franklin Templeton. There she earned her MBA and eventually moved to Putnam Investments, a job she pursued because of the team’s culture and leadership style and the firm’s “great collaborative environment.”

According to Holding, one of the top things she advises others to do is carefully examine the company culture and make sure it’s a good fit.

“It’s been a constant theme for me throughout my career, and after that first experience of investment banking and the culture at the firm I was with, I wasn’t willing to compromise going forward,” Holding said. “And especially as a working mom, I had to find both a career path and a culture and community that would allow me to have both a family and an amazing career.”

Holding stayed with Putnam for a total of 15 years, making the jump from fixed income to equities when a vacancy opened up in London to head international equity research. It was a “scary proposal” at the time and still one of the biggest professional challenges Holding has faced – but also an opportunity to both change her career path and explore a new country and culture with her family.

Holding has been with Fidelity for the past nine years and four years ago took over her current position as co-head of the firm’s equities department with Tim Cohen. Among the mentors who have guided her throughout her career, Holding cites Fidelity CEO Abby Johnson as an influence.

“Building those kinds of relationships is just hugely important, I think,” she said. “And it’s not necessarily always someone like you or like-minded — it’s someone who can actually complement your skills and thinking.”

The longer-term investment focus is crucial

Today, as co-head of Fidelity’s equities division, Holding oversees approximately $2.5 trillion in assets under management and employs approximately 300 people worldwide. Given the size of the asset pool it operates, Holding told Insider that it needs to think about investing over the long term and look for companies with “sustainable, long-term business models,” rather than buying meme stocks, for example.

After the correction that opened up the stock market this year, Holding believes equity returns “are looking attractive again,” particularly when compared to government bonds, corporate bonds and even high-yield bonds. However, she warned that the soaring double-digit returns in stock markets in recent years will most likely be a thing of the past.

“We’re still likely to see single-digit returns, which I think is still quite attractive on a relative basis. So I’m still constructive on the equities space,” she said.

Holding also believes the trend of value stocks outperforming will return to the norm. Value stocks took center stage in 2020, turning the script for a decade of consistent growth stock outperformance.

“The leadership in the market has changed. We went through that tipping point where value really outperformed growth,” she explained.

Due to Holding’s focus on longer-term market themes, she told Insider that she rarely plays through “short-term market swings caused by geopolitical events,” such as the ongoing Russia-Ukraine conflict. While energy and commodity prices have skyrocketed due to the crisis, Holding counters that whenever “you hear positive news from the situation between Ukraine and Russia, the price plummets”.

To take a longer-term view of commodities, she advises investors to focus on companies exposed to enduring trends, such as vehicle electrification. Within this particular industry, Holding pointed to potential profit assets such as copper and other EV battery commodities.

Overall, Holding highlighted large growth companies within the technology and healthcare Sectors appear to be the most attractive over a longer period of time.

“I still think we have so many companies disrupting all kinds of industries through technology,” she said. “One of the things we’re really trying to do is identify the key disruptors among the long-term winners by sector.”

Within healthcare, Holding stressed the importance of “choosing your place” but believes the biotech industry appears to be particularly rich in opportunity.

“There are so many amazing companies out there developing incredible drugs,” she said. “And honestly, this sector has been really decimated in the last few months, so I think there are probably some great near-term and even longer-term opportunities within biotechnology.”

Demographic change encourages ESG investing

In addition to focusing on long-term performance, Holding, who recently assumed the role of Head of Sustainability Investing at Fidelity, also emphasized the importance of investing in environmentally and socially responsible assets.

“Obviously, I see the business justification for ensuring we have a robust process for integrating environmental, social and governance factors into our investment process,” she said. “But we also hear it from our customers. That’s what they want.”

According to Holding, the pandemic has helped advance that focus by shedding light on various social justice and environmental issues. And as more women and younger demographics join the ranks of retail investors, these shifting demographics have also shifted the limelight to impact investing.

“These two categories are both our future investors because a lot of wealth is going to women,” Holding said. “Both of these two segments are very keen to invest alongside their personal assets.”

In general, financial literacy is a subject Holding is very passionate about and has devoted a lot of time to through her work at Fidelity. The ultimate goal, she said, is to help women and younger investors “overcome their fear of investing” and gain “more confidence” in their investment decision-making process.

To do this, Holding suggests attending seminars, listening to podcasts, and signing up with financial advisors early on. And even with her own children, Holding emphasizes the power of the market’s compound interest effect.

“You have to be religious and consistent and think long-term,” she said.

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