Unique investment style which is tactical, nimble, and high conviction and seeks alpha across active duration, yield curve management and credit exposure
Benefits from the collective investment expertise of our large global fixed income, equity, macro, ESG, and quant research teams
A focus on risk management to ensure the fund is efficiently diversified to ensure no single risk dominates
A broad and diversified portfolio of high-quality fixed-income assets selected from around 30,000 opportunities around the world.
A dedicated fixed income team with long tenure and experience. Globally, we've been managing global aggregate bonds for 30+ years.
A clear and repeatable team-based investment process which leverages insights from our network of fixed income and equity analysts worldwide.
EDITED TRANSCRIPT
The role that bonds play in a portfolio is they act as a diversification away from equities. Where our fund is quite unique is many buyers of fixed income don't quite appreciate that they're buying quite a lot of equity beta within that. So i.e., in a risk off scenario, those funds will struggle. How we like to position our fund with a defensive starting point, a focus on liquidity and quality really acts as that role as a diversifier.
In terms of the valuation backdrop and the yields on offer, whilst we're not quite at those 2022, 2023 levels of yields, they're actually very attractive from a post GFC perspective. So as a starting point, whilst there’s going to be some volatility ahead, that is inevitable. Yields are still attractive, which really does act as a buffer to total returns.
Interestingly and mistakenly Fidelity is often known as just an equity house and that doesn't really tell the full picture. We've been managing fixed income for 35 years, and within those 35 years, we've been managing global bonds for most of that time.
What sets us apart is we have a unique and dynamic investment process where we take high conviction bets, often the portfolio has around 100 to 200 names within that. We often start from a defensive starting point. So, we like to be a buyer of risk when others are maybe a full seller of that in a risk off move. Interestingly, we leverage on the resources of the equity platform, which is quite helpful for the portfolio management team in identifying turning points.
Often, you'll see there will be a different conversation between a credit analyst and an equity analyst with issuers management and that is really valuable.
Fidelity's approach to global fixed income is unique in the sense that we have an active, highly nimble and often contrarian approach. We have a very high turnover in our portfolios of around 200 to 400%, which is unlike many of our competitors. We buy names within the portfolio where we see that they're attractively priced and we see a spread tightening event in 3 to 6 months, which is very different to many of our peers who quite often are just focussed on building a portfolio with a higher carry.
Our track records in fixed income are particularly compelling. If you look on an excess return basis over ten years, they're in positive ground. I think also what really sets us apart, and we've touched on this a little bit briefly, is that defensive starting point. Often what you see in really challenging market conditions is the fund performing quite well.
Take 2020 as an example; that was one of the best years on record for the lead portfolio manager of this strategy, which is a real testament to our investment process.
Regarding how we're managing risk in the portfolio currently, obviously we've touched on that defensive starting point. But we are rather defensively positioned. Obviously, there's many unknowns ahead, that is how we feel is the way to position going forward. So that comes from a long duration bias slightly underweight in credit.
But if we talk more broadly about how we manage risk in the portfolio, quite often the question that we receive from clients is how you approach high yield investing. It's a little bit of a grey area.
Many of our competitor funds are quite aggressive in that space. To be transparent, we are not. So, we do have high yield in the fund. It's typically up to 10%. But I need to give a few strong caveats behind that. For a high yield name to be within the portfolio, it has to be double B plus or double B from a developed market non-cyclical issue.
We're not chasing EM risk in the high yield space. We're not going to be one of the punchier funds out there. We are a do what it says on the tin and do it well.
Fidelity's expertise in fixed income markets spans more than 35 years.
Investment Director Harry Hardy discusses how he and the team uncover investment opportunities through the Fund's nimble, contrarian, and active approach.
The role that the Fidelity Global Bond Fund can play in a portfolio today is often, given our defensive starting point focus on liquidity, the fund performs particularly well in volatile environments.
If you look back, some of the strongest years that we've had are those difficult times like a 2020 where we have risk off moves, spreads widening, duration rallying, etc. In these uncertain times ahead, we're positioned with a long duration bias, and we’re positioned with underweight credit risk in the portfolio. So, if we do see a slowdown emerge, if we see a recession, we believe that we are well positioned to capture alpha in those environments.
It's no secret that volatility isn't going away any time soon.
Discover how the Fidelity Global Bond Fund's contrarian approach can act as a diversifier in a balanced portfolio during volatile times.
Discover why utilising duration in fixed income assets might be the key to enhancing your portfolio's resilience in today's economic climate.
Lukasz de Pourbaix, Head of Strategic Sales and Solutions, explores the crucial role of duration assets and why now could be the perfect time to reconsider bonds.
Chart as at: 30 June 2025
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Total returns (net) have been calculated using exit prices and take into account the applicable buy/sell spread and are net of fees and costs and assume reinvestment of distributions. No allowance has been made for taxation or for any fees charged by operators of master trusts or wrap accounts through which the products are offered. Returns of more than one year are annualised. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. The Fund gains its exposure to global fixed income by investing in an offshore fund managed by one of our related entities (Underlying Fund). The holdings of the Underlying Fund are not selected, managed or measured with reference to any benchmark.
Net returns as at 30 June 2025
| Timeframe | 1 yr % |
3 yr % pa |
5 yr % pa |
Since inception (28/02/24) % pa |
|---|---|---|---|---|
| Fund | 5.10 | - | - | 4.59 |
| Benchmark | 5.45 | - | - | 4.68 |
| Active return | -0.35 | - | - | -0.09 |
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Total returns (net) have been calculated using exit prices and take into account the applicable buy/sell spread and are net of fees and costs and assume reinvestment of distributions. No allowance has been made for taxation or for any fees charged by operators of master trusts or wrap accounts through which the products are offered. Returns of more than one year are annualised. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. The Fund gains its exposure to global fixed income by investing in an offshore fund managed by one of our related entities (Underlying Fund). The holdings of the Underlying Fund are not selected, managed or measured with reference to any benchmark.
Net as at 30 June 2025
| 1 yr % |
3 yr % pa |
5 yr % pa |
Since inception (28/02/24) % pa |
|
|---|---|---|---|---|
| Total return | 5.10 | - | - | 4.59 |
| Growth | 2.89 | - | - | 2.94 |
| Income | 2.21 | - | - | 1.65 |
Growth return is the unit price movement on exit to exit basis. Income is expressed as Total Return less growth component.
Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Total returns (net) have been calculated using exit prices and take into account the applicable buy/sell spread and are net of fees and costs and assume reinvestment of distributions. No allowance has been made for taxation or for any fees charged by operators of master trusts or wrap accounts through which the products are offered. Returns of more than one year are annualised. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. The Fund gains its exposure to global fixed income by investing in an offshore fund managed by one of our related entities (Underlying Fund). The holdings of the Underlying Fund are not selected, managed or measured with reference to any benchmark.
| Distribution | Distribution (CPU) | Reinvestment price |
|---|---|---|
| 30-Jun-25 | 7.1806 | $10.3234 |
CPU = cents per unit. The above cash CPU excludes imputation credits and foreign income tax offsets which are non-cash components and are reported in the end of year tax statement. If the Distribution CPU column is 0.0000 it means that nothing was distributed.
As at 31 May 2025
As at 31 May 2025
As at 31 May 2025
| % total net assets | |
|---|---|
| GERMANY GOVT 2.6% 08/15/34 RGS | 6.6% |
| USTN 4.25% 11/15/34 | 5.9% |
| USTN 4.25% 01/31/30 | 5.0% |
| USTN 4.875% 10/31/28 | 4.9% |
| UK GILT 0.875% 07/31/33 RGS | 4.0% |
| USTN 4.375% 01/31/32 | 3.8% |
| GERMANY GOVT 2.2% 02/15/34 RGS | 3.4% |
| GERMANY GOVT 2.5% 10/11/29 RGS | 3.0% |
| USTN 5% 10/31/25 | 3.0% |
| CHINA GOVT 2.8% 11/15/32 | 2.6% |
| Organisation | Rating / Recommendation |
|---|---|
| Morningstar | Neutral4 |
| Lonsec |
Recommended5 |
| Zenith |
Approved6 |
This Fund is subject to the risk of stock market fluctuations. Investors accessing the Fund through a master trust or wrap account will also bear any fees charged by the operator of such master trust or wrap account. Any apparent discrepancies in the numbers are due to rounding.
1 Management fees and costs are current as at the date shown above but may be subject to change in the future. Management fees and costs include management fees, estimated indirect costs, the net effect of GST and exclude abnormal expenses, transaction costs and any performance fee payable.
2The Fund gains its exposure to global fixed income by investing in an offshore fund managed by one of our related entities (Underlying Fund). The holdings of the Underlying Fund are not selected, managed or measured with reference to any benchmark.
