Fidelity Fund Management Private Limited today announced its plans to launch a fixed income business in India. Fidelity has already established a fixed income fund management capability within its Mumbai investment operation and has now provided details of its first Indian fixed income product. Fidelity, which manages three equity funds and a multi manager cash fund, will launch the Fidelity Short Term Income Fund on 17 August.

Announcing the launch, Ashu Suyash, Managing Director and Country Head, Fidelity Fund Management Private Limited, said: “All investors should consider spreading their investments across several different classes of asset in order to provide the right balance of risk and reward. The core asset classes are equities, fixed income and cash. I am delighted that, through the launch of the Short Term Income Fund, we will be able to offer all three asset classes to Indian investors. Our fixed income investment process places the same strong emphasis on research that we apply to equity investment. Fixed income assets are a good diversifier of equity market risk and should find a place in investors’ portfolios as they look to build balanced portfolios.”

Andrew D. Wells, Chief Investment Officer, Asian Fixed Income, Fidelity International, said: “We recognised at the outset when we established our equities team in Mumbai, that it would be important to offer investors a wide range of investment solutions. With the enthusiastic response to our equity funds, we are keen to meet investor demand for high quality fixed income products. As with equities, we have a global network of investment professionals dedicated to the fixed income discipline. Investors will benefit from the Fidelity approach to managing fixed income assets which is unique in the Indian market.”

Fidelity’s approach to fixed income investing has two pillars - people and process. Fund managers follow a multi-strategy approach that spans asset allocation, yield curve positioning, interest rate expectations, sector allocation, issuer credit analysis and security valuation. To build and manage multi strategy portfolios successfully, Fidelity follows an integrated team approach. This means combining the specialist expertise of the fund manager, credit researchers, quantitative analysts and traders.

Fidelity’s fixed income team in India reflects this structure. Sameer Kulkarni is Fund Manager - Fixed Income, Fidelity Fund Management Private Limited, and he is supported by a team of two credit analysts and a trader.

Fidelity’s first fixed income product in India will be the Fidelity Short Term Income Fund, which is an open ended income scheme that aims to generate reasonable returns through a diversified portfolio of fixed income securities.

Speaking about the Fund, Sameer Kulkarni said: “Short term income funds provide a great alternative to volatile equity markets such as the one we are seeing now. The Fidelity Short Term Income Fund will play into the current steepness of the yield curve from a risk-return perspective. In managing the Fund, we will use the multi strategy, integrated team approach to create a diversified portfolio. Our multi strategy approach balances the many factors that affect bond prices and our portfolios actively exploit the opportunities we find, but do so through a number of lowly-correlated positions.”

Ashu Suyash added: “The product is beneficial to investors as it offers the opportunity to earn reasonable returns over shorter periods of time even as their overall portfolio works towards creating wealth over the long term.”

The Fidelity Short Term Income Fund NFO will be open from August 17 to 24. The Fund will have an Institutional and Non-Institutional Plan and each Plan will offer Growth and Dividend options. The Fund will have no entry or exit loads.

Fidelity Fund Management Private Limited is the Indian arm of Fidelity International Limited. Fidelity International Limited has offices in over 20 countries across Europe and Asia-Pacific. Fidelity International along with its US affiliate, Fidelity Management and Research Co., actively covers 95% of world market capitalisation. Central to Fidelity’s success is a pioneering spirit, a commitment to innovation that sets new industry standards and an unmatched investment in research, talent and technology. Driven by an entrepreneurial culture, Fidelity is known to actively pursue investor education and distributor training.
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