Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Spreadbury unleashes 150 best ideas for high yield fund

Spreadbury unleashes 150 best ideas for high yield fund

Fidelity is to unveil an unconstrained, global high yield fund for Peter Khan and Citywire A-rated and Selection star-pick Ian Spreadbury.

The new vehicle will launch on 19 March, subject to the regulator's approval, and will offer investors access to around 150 of Khan and Spreadbury's best high conviction ideas.

Fidelity Global High Yield will invest primarily in BB and B-rated credits, with the opportunity to include some CCC credits where the managers see an attractive risk-reward offering.

The launch comes at a time when UK 10-year gilts are yielding only 2% and as interest rates are expected stay at record lows of 0.5%.

Fidelity said there is a perception returns from high yield bonds are more volatile, although the asset class has historically shown lower levels of volatility than equities. The group added the majority of the total return from high yield bonds has come from income while the average sub-investment grade bond yields approximately 8%.

Khan, lead manager on the fund, is regarded as highly experienced in the high-yield market, having started his career as a fixed income trader with a specialism in high yield bonds.

Khan believes that banks’ limited appetite to roll over loans looks set to continue, which will encourage more companies to seek funding in the bond market.

'The move away from loans into high yield bonds has been a major trend in the last three years and it is expected to continue, especially throughout Europe,' the manager explained. 

By investing mainly in BB and B credits, the fund should participate strongly in up markets but also outperform during down markets,' Khan added.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Big City Bright Future

Big City Bright Future

Big City Bright Future, the brainchild of BlackRock, is a three-week work experience programme for school leavers looking to forge a career in the City.

Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Read More
Your Business: Cover Star Club

Profile: change is the only constant for Quilter Cheviot

Profile: change is the only constant for Quilter Cheviot

This is not the first time we have profiled David Miller, but at the time of his previous appearance his company looked very different.

Wealth Manager on Twitter