Partner Content by Fidelity

Looking east for income opportunities

China’s policy easing to date has been slower than we had expected. However, it is moving in the right direction, which is significant at a time when much of the rest of the world is hiking rates and unwinding quantitative easing. Volatility, defaults and bond exchanges will likely remain high. The fresh Covid-driven strict lockdowns experienced in key cities in China will be another driver of volatility, as lockdowns will naturally delay housing activity, reducing the short-term impact of easing.

Despite this, we are now cautiously optimistic that the incremental easing measures and depressed prices will mean that our Asia credit exposure will be one of our better performing allocations this year, with the additional benefit of being lowly correlated to other credit and equity markets.

Learn more about the Fidelity Multi Asset Income range

Important information

This information is for investment professionals only and should not be relied upon by private investors. The value of investments and the income from them can go down as well as up and you may not back what you originally invested. Investors should note that the views expressed may no longer be current and may have already been acted upon. These funds take their annual management charge and expenses from your clients’ capital and not from the income generated by the fund. This means that any capital growth in the fund will be reduced by the charge. The capital may reduce over time if the fund’s growth does not compensate for it. The Fidelity Multi Asset funds use financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. Changes in currency exchange rates may affect the value of investments in overseas market. Investments emerging markets can be more volatile than other more developed markets. The value of bonds is influenced by movements in interest rates and bond yields. If interest rates and so bond yields rise, bond prices tend to fall, and vice versa. The price of bonds with a longer lifetime until maturity is generally more sensitive to interest rate movements than those with a shorter lifetime to maturity. The risk of default is based on the issuer's ability to make interest payments and to repay the loan at maturity. Default risk may therefore vary between different government issuers as well as between different corporate issuers. Sub-investment grade bonds are considered riskier bonds. They have an increased risk of default which could affect both income and the capital value of the fund investing in them. Reference in this document to specific securities should not be interpreted as a recommendation to buy or sell these securities and is only included for illustration purposes. Issued by Financial Administration Services Limited, authorised and regulated by the Financial Conduct Authority. Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. UKM0522/370816/SSO/NA