Fidelity Investments Canada ULC has launched Fidelity Floating Rate High Income Fund, managed by experienced Fidelity investment professionals Eric Mollenhauer and Kevin Nielsen.
Craig Strachan, head of Product, Fidelity Investments Canada ULC, said: "With widespread uncertainty around how long interest rates can stay at today’s historically low levels, more and more Canadians are looking for investment products that can help mitigate the effects of rising interest rates on their portfolios while also seeking income from their investment. The Fund can provide Canadians with both. It is a high yield offering that aims to provide a steady flow of income by investing primarily in floating rate debt of non-investment-grade issuers located in the U.S. or whose debt is denominated in U.S. dollars."
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The Fidelity Investments organization has over 65 years of experience in managing money on behalf of investors with over 800 investment professionals worldwide.
Fidelity has been managing high income solutions since 1977 including floating rate debt, high yield debt and equities and emerging market debt and is a global multi-asset class solutions provider.
A unique asset class with multiple benefits
While floating rate debt funds are relatively new in Canada, Fidelity has been a market leader in managing this asset class in the US for a number of years; including launching the first daily liquidity floating rate debt mutual fund in 2000.
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By GlobalDataCanadian investors can benefit from Fidelity’s deep bench of talent and management experience in this unique asset class. Additional benefits of utilizing Fidelity’s offering include:
Help to mitigate the impact of rising interest rates: Floating rate coupons tend to move in tandem with short-term interest rates, thereby helping to reduce the impact that rising interest rates may have on a portfolio.
- Higher potential yields: The Fund invests in below investment grade floating rate debt, which may have higher yields than investment-grade fixed income securities.
- Greater diversification: Historically, floating rate debt has exhibited a low correlation of returns to many other asset classes which can potentially improve a portfolio’s risk-adjusted returns.
- Seniority in the US capital structure: Floating rate debt is typically senior and secured in a US company’s capital structure.
- Depth of resources: Fidelity has one of the largest high income investment research and portfolio management teams in the industry with more than 60 dedicated professionals. As a firm, Fidelity manages over US$90 billion in high income assets and over US$17 billion in floating rate debt assets.
Strachan added: "Detailed, comprehensive fundamental analysis is critical to investing in this asset class. Few asset managers globally have the resources, dedicated investment professionals and experience investing in floating rate debt as Fidelity."
