3 Strong Taxable-Bond Funds From Fidelity

Emory Zink: Fidelity’s taxable-bond efforts benefit from a robustly resourced and team-managed approach. Portfolio managers are in regular dialogue with a macroeconomic research group and consult with sector specialists from across the firm’s broader fixed-income cohort--which includes over 70 analysts assigned to high-yield, emerging markets, real estate, investment-grade corporate credit, and mortgages--all to assemble an informed view of the investment landscape. Clusters of portfolio managers with a particular mandate focus, such as limited-duration or core bond, are joined by a dedicated quantitative resource on each group’s desk, and these teams are located within a few steps of each other. The result of this setup is that investment themes and ideas aren’t developed in isolation, but rather they are identified, researched, tested, and shared across the platform. When coupled with the firm’s continued commitment to developing its proprietary data and risk tools, Fidelity’s integrated approach has served its fundholders well. 

A few of our Medalist recommendations include Silver-rated Fidelity Mortgage Securities, which is helmed by firm veteran Franco Castagliuolo and his comanager Sean Corcoran. This strategy focuses primarily on government fare but has held anywhere from 10% to 20% in nongovernment bonds in recent years. It is conservatively run relative to many government mortgage funds, but over the longer term, its lower-priced shares have kept pace with its Bloomberg Barclays U.S. Mortgage Backed Securities Index and the strategy has held up well relative to peers over periods of credit market stress.