FSMD - Fidelity High Income Fund Q2 2024 Review
2024-07-31 08:45:00 ET
Summary
- Fidelity Contrafund is a large-cap growth biased equity strategy focused on companies with durable multiyear earnings growth potential.
- Fidelity High Income Fund is a diversified high-yield bond strategy focused on investing primarily in the bonds of non-investment-grade companies.
- High-yield bonds gained 1.51% in the first quarter, according to the ICE BofA U.S. High Yield Constrained Index, driven by resilient corporate fundamentals, tightening credit spreads and the Federal Reserve's likely pivot to cutting interest rates in 2024.
- For the quarter, the fund's Retail Class shares gained 2.33%, outpacing the 1.51% advance of the benchmark, the ICE BofA U.S. High Yield/US High Yield Constrained Blend Index.
Investment Approach
- Fidelity® High Income Fund is a diversified high-yield bond strategy focused on investing primarily in the bonds of non-investment-grade companies.
- We apply a core investment approach, with the majority of the fund concentrated in securities rated B and BB, and typically below-benchmark exposure to the more opportunistic, lower-rated (CCC or below) credit tiers.
- We take a consistent, conservative approach, focusing on higher-quality, less-cyclical industries and businesses. In particular, we seek companies with strong balance sheets, high free cash flow, improving business/industry fundamentals and solid management teams. In doing so, we take a longer-term investment outlook, with a focus on the best risk-adjusted opportunities that we can find in the market.
- We strive to uncover these companies through in-depth fundamental "bottom-up" credit analysis, working closely with Fidelity's high-income and global research teams.