Fidelity launches emerging market corporate debt fund

Fidelity Worldwide Investment is expanding its fixed income range with the launch of an emerging market corporate debt fund.

The FF Emerging Market Corporate Debt fund, managed by Andrei Gorodilov, will aim to deliver an attractive level of income by investing in 150-200 bonds issued by corporations domiciled in emerging market countries such as Russia, Mexico, Turkey, Brazil, South Korea, Indonesia and China.
 
Fidelity's investment process relies on a strong and well established fundamental credit research function, a dedicated trading platform and rigorous quantitative analysis. All this is combined with strict adherence to tight portfolio risk controls to deliver a well-diversified portfolio.
 
Portfolio manager Andrei Gorodilov, who has worked at Fidelity Worldwide Investment since 2004, has over 14 years experience and manages over US$4bn of assets.
 
Why emerging market corporate debt?
 
The rise in emerging markets is well documented and many investors appreciate the merits of investing in these regions. Although emerging markets account for 84% of the world's population, they still only account for 38% of its GDP. An increasing portion of the emerging market population is now joining the ranks of global middle class consumers, which is set to further drive rapid growth.
 
Emerging market (EM) companies have helped drive much of the economic success and improved creditworthiness that we have seen recently, yet at present many EM corporate bonds are tied to the financial and commodities sectors. As the asset class evolves and expands over the longer term, investors can gain exposure to growing domestic demand by investing in emerging market corporate bonds.
 
Portfolio manager Andrei Gorodilov comments: "The EM corporate bond market presents an investment opportunity that is becoming difficult to ignore. The market size of the US dollar denominated portion of the EM corporate debt market now rivals other well established fixed income asset types.
 
"The current EM corporate universe presents a well-balanced investment grade and high yield opportunity set, with a broadly diversified regional and country universe. Even with the large returns seen historically, we still expect the asset class to appeal to investors, mainly thanks to income-generation although selected capital appreciation opportunities may still present themselves. Irrespective of strategy, a robust investment process that considers different types of risk is critical. At Fidelity, we believe an active approach that selects emerging market corporate bonds carefully through a robust bottom-up process combined with rigorous top-down country analysis can offer our clients real value."
 
Fidelity Emerging Market Corporate Debt Fund is a Luxembourg-domiciled Sicav. The comparative index is the JP Morgan Corporate Emerging Market Bond Broad Diversified Index (JPM CEMBI Broad Diversified Index).
 
Minimum investment is US$2,500, or $50 per month, for the A share class (AMC 1.2%) and $1 million minimum for the Y share class (AMC 0.6%).