| Scorecard |
|---|
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4 / 5 Stars
|
|
Lipper
5
5
1
5
2
|
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Zacks Investment Research
2
(Buy)
|
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Standard & Poor's
4 / 5 Stars
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TheStreet.com
B
(Buy)
|
#4 in Emerging Markets Bond
U.S. News evaluated 77 Emerging Markets Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
See all Fidelity Investments funds
Performance
The fund has returned 11.99 percent over the past year, 11.06 percent over the past three years, 10.96 percent over the past five years, and 11.11 percent over the past decade.
| Trailing Returns | Updated 04.30.2013 |
|---|---|
| Year to date | 0.5% |
| 1 Year | 12.0% |
| 3 Years (Annualized) | 11.1% |
| 5 Years (Annualized) | 11.0% |
| 10 Years (Annualized) | 11.1% |
Summary
Emerging markets can take investors on a wild ride sometimes. To help smooth things out, fund manager John Carlson takes a more conservative approach to investing in emerging markets bonds by steering clear of big interest-rate or currency bets and mainly buying less-risky government-backed bonds.
As of May 03, 2013, the fund has assets totaling almost $7.12 billion invested in 287 different holdings. Its portfolio primarily consists of U.S. dollar-denominated government bonds in emerging markets countries, with a smaller portion of corporate and local currency bonds.
According to Morningstar, Carlson is "quite diversification-conscious." Lately, the fund has been overweight in countries such as Argentina and "frontier markets" in Africa including Ghana, Gabon, and Ivory Coast. Although the fund has only a modest position in local currencies, Carlson says he likes the currencies in Brazil, Indonesia, and Turkey because of the growth prospects and the fiscal austerity in each of those countries. The fund has returned 11.99 percent over the past year and 11.06 percent over the past three years.
Carlson's decision to overweight Argentina, Russia, and Ukraine boosted the fund's performance in 2009 and has contributed to the fund's solid long-term returns. The fund's three- and five-year returns rank it in the top 8 percent and 18 percent of its category, respectively, as of the end of the first quarter. The fund has returned 10.96 percent over the past five years and 11.11 percent over the past decade.
Investment Strategy
This fund seeks income and capital appreciation and uses a top-down approach to identify opportunities in the market. “The objective is to avoid blow-ups, and to look for undervalued sovereign opportunities,” says Carlson. “In laymen’s terms, that means doing a lot of hard credit work and getting there before the crowd.”
To construct the portfolio, Carlson looks at the global, macro backdrop, then considers what’s happening within emerging markets. Then he builds the portfolio country-by-country and bond-by-bond, collaborating heavily with his research team to come up with the market inferences that direct his investment decisions.
The fund also has a small amount of corporate bonds, local currency bonds, and equities designed to “add to the [fund’s] performance and returns,” Carlson says.
Role in Portfolio
Morningstar calls this fund a specialty investment.
Management
John Carlson has been in charge of the fund since 1995, which, according to Morningstar, makes him the second-longest serving emerging-markets bond fund manager. In the past, Morningstar has described Carlson as being defensive in a very aggressive asset class, a depiction Carlson supports with the caveat that his approach is less about being defensive and more about being consistent. “I characterize myself as a core manager,” Carlson says. “To get that consistency, I have the belief that what the prospectus says I actually do. There is no style drift and I have a very disciplined approach to risk limits and how far I’ll go outside the benchmark at any time.”
Fund Opinions
The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.
Value Line 2013-03-12
The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 2 for one year, 1 for five years, and 1 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.
Value Line 2013-03-12
The fund's Value Line Risk Rank, a measure of volatility, is 4 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.
Value Line 2013-03-12
"Investors who are seeking emerging-markets bond exposure should be sure to consider this fund," Morningstar analyst William Samuel Rocco says. "But such investors should be sure they understand that this fund is not immune to the dangers of its wild asset class, and that it will experience some painful periods."
Morningstar 2010-11-10
In the annual Lipper/Barron’s Fund Families Survey of 2010, the Fidelity family ranks 33 out of 57 fund families surveyed.
Lipper
Morningstar gives this fund a stewardship rating of C on a scale of A to F. “This fund has some good things going for it on the stewardship front, including low fees and a generally attractive culture. However, other factors, including poor manager ownership and an insufficiently independent board, bring its overall grade down to middling territory.”
Morningstar 2011-04-01
In the annual Lipper/Barron’s Fund Families Survey of 2010, the Fidelity family ranks 33 out of 57 fund families surveyed.
Lipper
Morningstar gives this fund a stewardship rating of C on a scale of A to F. “This fund has some good things going for it on the stewardship front, including low fees and a generally attractive culture. However, other factors, including poor manager ownership and an insufficiently independent board, bring its overall grade down to middling territory.”
Morningstar 2011-04-01
