Winners rationale

Yields remained lower for longer in 2020, as markets continued to see a shift into more monetary and fiscal easing. Fidelity International distinguished itself from its peer group in this increasingly challenging environment, where generating an attractive return from US bonds had become harder than ever before.Focusing primarily on capital appreciation, the firm’s flagship US bond strategy — the Fidelity Funds US Dollar Bond Fund — exhibited an extraordinary level of resilience, especially during market volatility. The strategy historically has a high negative correlation with the equity markets. This was evident in late 2018 and more recently during the height of the COVID-19 selloff in 1Q20.

The numbers speak for themselves. In 4Q18, the fund’s A-USD share class advanced 1.8% in total return terms, while the S&P 500 returned -13.5% over the same period. In 1Q20, the fund’s A-USD share class returned 4.6%, while the S&P 500 returned -19.6% over the same period.

Although the strategy has a conservative profile, it does take periodic risk-on positions when markets present opportunities. A good example of that was in 2020, when the portfolio took advantage of some very attractive valuations on offer in 2Q20 (as a result of the wider market desolation) to selectively add some high-quality corporate credits that were being indiscriminately sold off.

Fidelity’s impressive investment results couldn’t have been achieved without its rigorous credit research and analysis team which underpins the strategy and the firm’s overall investment process and culture. Fidelity’s approach to company research is unique in that there is close collaboration between the fixed income credit research and the equity analyst teams. This enables the firm to perform more in-depth analysis of companies and reach a more holistic view.

Fidelity’s commitment to delivering superior service and investment solutions that meet the demands of the Asian private bank sector remained at the heart of its business strategy in 2020. During the pandemic, the firm quickly adapted to new technologies and adopted different manners of conducting business. As a result, net sales in the private banking industry in Asia achieved a record year in 2020.

Fidelity International is Asian Private Banker’s Best Fund Provider – US Bond.