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Fidelity launches global high yield fund

Fidelity Worldwide Investment is to launch a global high yield fund for managers Peter Khan and Ian Spreadbury on March 19.

The launch is subject to FSA approval and will invest a portfolio of 150 holdings “principally in BB and B-rated credits”, with the option to hold CCC-rated securities.

Fidelity Global High Yield co-manager Peter Khan says: “Banks’ limited appetite to roll over loans is likely to continue, encouraging more companies to seek funding in the bond market.

“The move away from loans into high yield bonds has been a major trend in the last three years and it is expected to continue, especially throughout Europe.”

He adds: “Low interest rates should also continue to increase the investor base for higher yielding assets, which will help to absorb the new supply.

“And, assuming the economy avoids recession, it should foster strong demand for higher yielding products and good, but volatile, new-issuance conditions.”

The Oeic fund will sit in the IMA £ high yield sector and will be benchmarked against the Bank of America Merrill Lynch Global High Yield Constrained index.

Minimum investment in the fund will be £1,000 and will carry an annual management charge of 1.25 per cent.

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