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Fidelity launches global bond fund in Australia

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The firm says the launch is part of a continued effort to expand its fixed income capability in Australia.

Fidelity International has announced the launch of the Fidelity Global Bond Fund – an actively managed portfolio jointly managed by fund manager Rick Patel and two fixed income portfolio managers, Ario Emami Nejad and Daniel Ushakov.

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

According to Fidelity, the fund has an overall average AA-investment grade credit rating as rated by internationally recognised rating agencies.

Fidelity’s managing director, Lawrence Hanson, said the launch is in response to growing client interest in, and demand for, investments in quality government and investment-grade corporate bonds.

“Clients are increasingly seeking alternative investment options with lower risk exposures to complement their current investment strategies,” he said.

“The launch of 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.”

Fidelity’s global cross asset specialist, Lukasz de Pourbaix, believes Australia is approaching the end of the long-running interest rate hike environment, noting that this will be beneficial to investment bonds of this kind.

“Should central banks begin easing interest rates once inflation is deemed to be under control, 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.

Among the benefits of the fund, the firm said it 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,” Mr de Pourbaix said.

“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.”

In October, Fidelity launched the Fidelity Global Long Short Fund – an actively managed global equities fund managed by London-based portfolio manager Dmitry Solomakhin.

The fund, which adopts a long/short strategy, typically holding between 45–55 long and between 25–35 short positions, was launched in Australia in response to growing client interest and demand for an alternative to traditional global equities strategies.

“We have seen increased interest from clients who are looking to generate higher levels of returns, and who are comfortable taking on the risks and elevated volatility that comes with a strategy like the Fidelity Global Long Short Fund,” said Mr Hanson at the time.

“We already offer a range of products and investment choices for Australian investors and this fund expands the Fidelity offering in Australia, providing investors with further access to our global investment capability.”