ONEQ - Fidelity Floating Rate High Income Fund Q1 2025 Review
2025-05-07 00:30:00 ET
Summary
- Fidelity Floating Rate High Income Fund is a diversified leveraged-loan strategy focused on investing primarily in loans that banks have made to non-investment-grade companies.
- Leveraged loans gained 0.46% in the first quarter, as measured by the Morningstar LSTA US Performing Loans Index, lagging most other fixed-income categories.
- For the quarter, the fund's Retail Class shares gained 0.26%, versus 0.46% for the benchmark, the Morningstar LSTA US Performing Loans Index.
Investment Approach
- Fidelity® Floating Rate High Income Fund is a diversified leveraged-loan strategy focused on investing primarily in loans that banks have made to non-investment-grade companies.
- We apply a core investment approach, with the majority of the fund concentrated in securities rated B and BB – the heart of the leveraged-loan market – and below-benchmark exposure to the more opportunistic, lower-rated (CCC or below) credit tiers.
- In particular, we seek companies with strong balance sheets and collateral coverage, high free cash flow, manageable capital structures and improving credit profiles. In doing so, we take a longer-term investment outlook, with an eye to where we are in the credit cycle.
- We strive to uncover these companies through in-depth fundamental credit analysis, working in concert with Fidelity's high-income and global research teams, with the goal of achieving competitive risk-adjusted returns over a full credit cycle.