Fidelity launches global fixed income fund, as bond investors gear for rate drop

Fidelity International has unveiled a new Global Bond Fund for Australian investors promising exposure to quality government and investment-grade corporate bonds.

The actively managed fund invests primarily in investment grade global sovereign bonds and global corporate bonds, whilst also providing some exposure to global high-yield bonds and emerging market bonds.

Besides regular income distributions, Fidelity boasts that its active bond fund also offers the potential for higher returns than traditional cash investments over the medium to long term.

“To generate attractive returns, we combine diversified investment positions advised by our in-house fundamental credit research, quantitative modelling and specialist traders,” said Fidelity’s global cross asset specialist Lukasz de Pourbaix.

“The fund provides a broad and diversified exposure to global bond markets, and we have the ability to allocate exposure to different geographies, currencies, sectors, and maturities to meet the Funds’ return and risk objectives,” de Pourbaix added.

Fidelity managing director Lawrence Hanson said the fund launch meets a growing client demand for alternative investment options with lower-risk exposures that can complement their current investment strategies.

He added that the Fidelity Global Bond Fund “further expands our service offering in Australia, providing investors with investment choice and diversification, and access to our global investment capabilities”.

de Pourbaix noted that bond investors may be able to reap benefits from the current global economic trends, particularly with an expected easing of interest rates.

“This would be positive for bond strategies, particularly those that are exposed to duration risk such as government bonds or strategies benchmarked against the Bloomberg Global Aggregate Bond Index,” he said.

Global ratings agencies have given the Fidelity Global Bond Fund an overall average AA-investment grade credit rating.

The fund is jointly managed by Fidelity’s Rick Patel, Ario Emami Nejad and Daniel Ushakov.

A leading global investment firm, Fidelity International manages US$728.6 billion (AU$1.1 trillion) in funds across 25 countries.