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Fund manager Ian Spreadbury seeks to add value relative to peer group funds by investing in a diversified portfolio of predominantly quality UK corporate bonds. The fund may also invest up to 25% in gilts or other developed market government securities. Exposure to high yield bonds is limited to 5%, and there are no holdings in convertibles or preference shares. The corporate bonds are predominantly sterling / euro denominated, with all foreign currency exposure hedged back to £.
Bonds issued by major governments and companies will be more stable than those issued by emerging markets or smaller corporate issuers; in the event of an issuer experiencing financial difficulty, there may be a risk to some or all of the capital invested. Any historical or current yields quoted should not be considered reliable indicators of future performance.
|Sector||£ Corporate Bond|
|Dividends paid||25th day of each month|
|Standard initial charge||0.00%|
|Initial charge via Bestinvest||0.00%|
|Additional bid/offer spread||0.00%|
|Annual management charge||0.40%|
|Ongoing charges figure||0.57%|
Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Information Investor Document, which we make available to you before you make a decision to invest, alternatively it is available on request.
This is a core UK quality bond fund run by one of the most respected fund managers in the peer group, with a proven track record across market cycles. The fund is managed with a view to delivering outperformance relative to the sector, consequently its performance is unlikely to deviate substantially from the broader asset class. Historically the manager has been one of the more conservative investors in his peer group, but has still achieved strong risk return credentials.
|High yield bonds||5|
The fund is benchmarked for performance purposes against the peer group, with the aim of providing superior risk adjusted returns. The investment process is split approximately 50/50 between quantitative driven models and traditional fundamental analysis. The manager seeks to add value through asset allocation (gilt or non-gilt), sector and quality allocation (industry and credit rating), yield curve strategy and individual stock selection. The portfolio is structured to provide exposure to diversified sources of alpha to ensure that no particular strategy dominates the risk profile and active trades have as little correlation as possible with each other. Relative duration positions are usually +/-1 year measured against the Merrill Lynch Euro-Sterling index and have historically assumed a lesser role.
|Fund data updated on||20/09/19|
|High yield bonds||5|
As at: 31/07/2019
8.28% Hm Treasury United Kingdom Dmo 1.5% Gilt 22/07/26 Gbp0.01
2.38% Electricite De France
2.33% (Thames) Thames Water Util Cay Fi
1.78% (Lloyds) Hbos Plc
1.78% Aspire Defence Finance
1.6% (Housfn) Thfc Social Housing Fina
1.52% At&T Inc
1.36% (Cpkln) Cpuk Finance Ltd
1.35% Western Power Distribution
1.35% European Investment Bank
|Investment Grade Bonds||65%|
|Investment Grade Government Bonds||5%|
|High Yield Bond||4%|
Typically around 200 issuers.
Max 30% non-sterling assets (all hedged). Max 5% in high yield debt. Max 25% in gilts. Duration collar +/- 1 yr.
There are some limits placed on the portfolio but these could result in significant divergences from the Index from time to time.
|Average monthly relative returns||Bestinvest MRI|
|14/15||15/16||16/17||17/18||18/19||3 years||5 years||Career||3 years||5 years||Career|
|Performance figures are based on the average of monthly percentage returns relative to the benchmark index.|
Vaid joined Fidelity in 2015. Prior to this he joined Royal London Asset Management in 2001 where he managed their flagship retail and institutional corporate funds. In 1997, he joined Fuji Investments as a bond fund manager. He started his career in 1994 when he joined Gerrard Group as a trainee bond fund manager. Vaid graduated from the University of Hull in 1991 in Economic & Social History and holds an MA in Modern International Studies from University of Leeds. Atkinson looks back on 14 years of investment experience, which since joining Fidelity in 2000 as a credit analyst has acquired. Atkinson is a CFA Accredited and has charter holder an MA from the University of Cambridge.
The track record of Sajiv Vaid / Kristian Atkinson in managing mutual funds in this sector is still too short for us to draw any meaningful conclusions and so our assessment is based largely on qualitative aspects.
|Periods of worst performance|
|Absolute||0% (July 2019 - August 2019)|
|Relative||-1% (January 2019 - July 2019)|
Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.