Winners rationale

High yield bonds shrugged off concerns over rising rates, spread levels, and a market getting ahead of itself, to post a strong 2017, when the global high yield index delivered a total return of 10% following 2016’s 15%. The US continued to outperform Europe – 7.2% total return versus 6.7% on a local currency basis – and, given the benign market backdrop and strength in the energy sector, default rates fell over the course of the year, from 2016’s 5.6% to 2017’s 3.3% in the US and 2.5% to 2.3% in Europe over the same period.

With the asset class outperforming and Asian investors’ ‘chase for yield’ continuing unabated, fixed income gained traction in early 2017 among the region’s HNWIs before tightening spreads and rising interest rate risks gave way to a less positive view.

In the high yield bond space, Fidelity International, boasting 29 credit research analysts with an average industry experience of 13 years and staff distributed across Hong Kong, Mainland China and London, was the standout solutions provider in 2017, leveraging its formidable expert experience to offer European and US high yield strategies, since 2000 and 2001, respectively.

In Asia, the firm’s high yield strategy was among the first of its type in the market and has consistently delivered outperformance. Even more impressively, Fidelity International was the first foreign asset manager to receive a green light to launch funds to wealthy Chinese investors under a Wholly Foreign-Owned Enterprise (WFOE) private fund manager qualification. Going forward, the firm aims to on-board its high yield strategy covering China market for select clients.

Private banking gatekeepers, pointing to the firm’s quality of solutions and servicing, chose Fidelity International as this year’s Best Fund Provider – High Yield Bond.