fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

Fidelity Strategic Bond Y

A less constrained hybrid bond portfolio investing across global fixed income markets.

  • 132.50p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 139.10p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.50%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.66%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 2.70%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 18 June 2021, fund data last updated 13 September 2012

The fund's objective is to provide a relatively high income with the possibility of capital growth by investing in an optimal blend of government, corporate and high yield bonds. The managers aim to outperform these broad asset classes over a market cycle while delivering a low correlation with equity returns. The fund falls within the IA Strategic Bond peer group and represents the manager's least constrained, best ideas portfolio.

Fund summary

Sector £ Strategic Bond
Structure OEIC
Launched October, 2009
Size £1,067m
Yield 2.70%
Charging basis Income
Dividends paid Monthly

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.50%
Ongoing charges figure 0.66%

Allocation

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Investment process

Whilst the fund mandate explicitly allows exposure to be up to 100% in government bonds or quality corporate bonds and up to 50% in high yield bonds; the Fidelity Quant team has identified an optimal allocation of 20% government bonds, 60% quality bonds and 20% high yield which may be adjusted to reflect spread reversion potential and market drivers. This is not a starting point but more of an average allocation that we might expect to see across a market cycle. The fund is also able to invest in foreign currency denominated bonds although a minimum of 90% must be invested in sterling denominated bonds or hedged back into sterling. Active management of duration relative to the benchmark (BofA ML £ Large Cap Index) will generally assume low importance and is primarily a function of asset allocation, credit and sector selection. Interest rate decisions may be played out across international yield curves. Fund volatility is expected to be similar to his quality corporate bond mandate. The mandate allows for derivatives to be used for investment purposes.

This is the manager's most flexible mandate in terms of asset allocation; it may be fully invested in government or corporate bonds or may invest up to 50% high yield. However, high yield allocation is likely to average 20% over a market cycle with 60% invested in quality bonds and the remainder in government bonds. The fund may also invest in cash and index linked bonds and the mandate enables the manager to use fixed income derivative instruments to express credit and interest rate views.

Manager research

Average monthly relative returns

  • 16/17 0.00%
  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.23%
  • 20/21 -0.11%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.08%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Claudio Ferrarese / Tim Foster

Foster joined Fidelity in 2003 as a Quantitative Analyst and progressed to become a Portfolio Manager in 2007. Foster has a BA, MSci in Natural Sciences from Cambridge University and is a CFA charter holder. Ferrarese joined Fidelity in 2006 as part of the quantitative research team. Ferrarese is portfolio manager at Fidelity International and has co-manager responsibility for the company’s total return franchise.

Track record

The track record of Claudio Ferrarese / Tim Foster 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 -6.00% (February 2020 - March 2020)
Relative -2.00% (July 2020 - March 2021)

About the MRI

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.

Allocation

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Top 10 holdings

Data accurate as at 30 June 2020

15.35% (T) United States Of America
4.12% Hm Treasury United Kingdom Dmo 2% Gilt 22/07/20 Gbp0.01
2.67% (Jgb) Japan
2.3% (Tii) United States Of America
1.72% (Sseln) Sse Plc 3.125%/Var Perp Rgs
1.17% State Of Qatar
1.07% (Atostr) Autostrade Per L'italia
.99% (Ispim) Intesa Sanpaolo Spa
.98% Edp - Energias De Portugal Sa
.97% (Wfc) Wells Fargo & Company
Source: Trustnet

Sector breakdown

BBB 29.00%
BB 19.00%
AAA 18.00%
B 11.00%
A 10.00%
AA 7.00%
Non-Rated 2.00%
CCC 2.00%
Others 1.00%

Portfolio

Maximum allocations: high yield bonds: 50%, government bonds: 100%, corporate bonds: 100%. Typically 250-300 positions.

Constraints

Approximately 50% of the fund's alpha is anticipated to be attributable to asset allocation, the balance being split evenly between stock selection and yield curve positioning. Maximum 10% unhedged foreign currency exposure.

Key Investor Information - Income

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Key Investor Information - Accumulation

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