2024-08-09 11:25:00 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 continued to post steady monthly gains in the second quarter of 2024, aided by resilient corporate profits and a generally favorable environment for higher-risk assets.
- For the quarter, the fund's Retail Class shares gained 1.40%, lagging the 1.94% advance of 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.
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For further details see:
Fidelity Floating Rate High Income Fund Q2 2024 Review
