Tenstarfinancialservices.files.wordpress.com
Welcome back from March break.? We’ve included a helpful tool on the Back to Basics for tax time, a client friendly to reminder of the April 30th deadline, shifting portfolios from investment grade bond portfolios to diversified fixed income and update on the Fidelity? U.S. Monthly Income Fund – positioning and performance attributes.?Please find the attached market pieces below:? ??Week in Review: This is a great, client-friendly piece that explained what happened in the market last weekBack to Basics Tips – Michelle Munro, Director of Tax Planning Fidelity Investment Canada Shifting investment grade fixed income portfolios to diversified fixed income.? There are diversified solutions if you’re concerned about investment grade bond portfolios, for clients who want to stay in fixed income – consider Fidelity Tactical Fixed Income fund or fixed income balanced -? Fidelity Income Allocation Fund (70% fixed income/30% equity) ? equity markets had strong performance during 2012, and outperformed the fixed income markets.Emerging markets was the best performing region in 2012; whereas S&P 500, which broadly represents the U.S. equity market, performed better than the rest during February 2013 and last 12-months. Improvement in the U.S. housing market, stronger economic data releases and continued support from the Federal Reserve buoyed the markets. Stimulus measures by other central banks also helped the equity markets.???Update on Fidelity U.S. Monthly Income Fund YTD 7.30% FIDELITY U.S. MONTHLY INCOME – FUND UPDATE As of February 28th, 2013? Fidelity U.S. Monthly Income Fund has posted a return of 7.7% (net of fees) since inception on November 7th 2012.Asset Allocation as at Jan 31st, 2013Asset ClassFund Weight (%)Benchmark (%)U.S. Equity40.640American High Yield 9.612Convertibles5.15Floating Rate2.50Emerging Mkt Debt55U.S. REITs6.77U.S. Bonds3131Cash & Other Assets-0.60Total Fund100100Lead portfolio managers Geoff Stein & Mariana Egan believe that high-yield (HY) remains an attractive asset class given its potential for higher yield and diversification benefits. The Fund has had an underweight allocation to HY in order to make an opportunistic allocation to Floating Rate Loans. Loans offer attractive characteristics by providing a higher yield than investment grade bonds and also carry no interest rate risk since the rates on loans are regularly reset.U.S. Dividend - positioning? Playing the housing theme through the wealth effect. U.S. Housing has transitioned from being a drag, to being neutral and now a positive to the US economy. Manager Jim Morrow is playing this theme not only through holdings in housing-related stocks, but also by holding consumer stocks. The US economy is 70% consumer, and the consumer’s largest asset is their home.? US energy independence continues to be an important theme: As the US is approaching energy independence, the manager has invested in select energy and manufacturing companies that are well positioned to benefit from this resurgence.? Overweight technology: This hasn’t historically been a source of dividends but this is starting to change with bellwether companies such as Apple and Cisco initiating and boosting dividends lately. The manager believes that the potential for further dividend growth in the sector is high. The managers prefer high-quality service company names in this sector, that are capital-light and require minimal funding from external markets.? Overweight consumer staples: Many companies in these sectors have the key characteristics that the manager seeks; trading at reasonable valuations, high quality ROE, attractive yields and earnings growth that can sustain dividend growth.? Continues to be diverse across the sectors: The managers continue to find attractive opportunities across all the ten GICS sectors, not just the traditional sectors such as telecoms and financials.U.S. Dividend - performance? Investments in materials stocks has been positive: The Fund has benefitted from not holding stocks such as Freeport McMoran Copper & Gold, and Newmont Mining.? Keen focus on avoiding dividend traps: Critical to performance has been avoiding companies that are susceptible to dividend traps. These are companies with unsustainable dividends, ultimately resulting in the dividend being cut or eliminated. Choosing not to invest in grocery retailer SuperValu is a strong example of this over the last twelve months.U.S. Investment Grade Bonds - positioning? Overweight Risk and underweight Treasuries: Atluri believes that favorable market technicals, strong corporate fundamentals and a growing US economy favour outperformance of risk assets over US Treasuries.? Maintaining liquidity: The manager is maintaining treasury and Agency MBS positions, as they provide both “dry powder” and liquidity.? Remaining tactical: Important fiscal and monetary catalysts remain on the horizon, which the manager will seek to tactically exploit.? Asset Allocation: The sleeve is positioned overweight to Corporates, CMBS, and Agency MBS. It is underweight Treasuries and Agency.U.S. Investment Grade Bonds - performance? Overweight in financials helped performance: The credit quality in the sector is improving, banks are getting better and spreads are now wider than pre-crisis levels. In particular, investments in REIT’s have helped, which Atluri believes are of a high quality.? Underweight in Industrials detracted: During the rally of recent months, the sleeve was adversely impacted by being underweight the industrials sector. The manager is less optimistic on this sector, given that there tends to be more riskU.S. High Yield - positioningStein and Egan note that high yield spreads have come in significantly and are currently tight, meaning that it’s a coupon clipping environment with limited upside from capital appreciation. He believes that high-yield and loans fundamentals are sound, helped by improving US growth and good company balance sheets. Forecasted default rates are low and despite a pick-up in LBOs, covenants are still strong.? Positioned neutral-to-lower risk than the index: In terms of credit quality, Harley Lank has positioned the holding relatively defensively, with overweight positions in non-rated investments (which typically consist of bank loans) and cash, which represents a buffer.? Remains active at the sector level: At the end of the period, the sleeve diverged most from the benchmark weightings by having overweight allocations to utilities and diversified financial services issuers, and underweight allocations to energy, metals and mining, and capital goods and services.U.S. High Yield - performance? Investments in diversified financials hurt performance: Investment in the diversified financial service industry detracted from performance because financial companies with exposure to Europe remained under pressure due to concerns about the ongoing debt crisis and weak economic growth in the region.? Holdings in telecoms and utilities helped performance: Investments in utilities were the most significant contributors to performance due to seasonal factors, given that the winter is typically the high energy consumption period. Investments in the telecommunications industry added value also, thanks to renewed capital spending in telecom infrastructure and continued growth in the user base.Real Estate – positioning? Focus on stock picking: The names in the sleeve are a derivative of bottom-up stock selection, as real estate fundamentals have continued to steadily improve and the environment looked more similar to the pre-2007 time period. At period end, the fund had no top-down active positions; sector/industry allocations were primarily a function of bottom-up stock selection.? Focus on stocks with organic growth: Thematically, the manager continued to focus on companies with strong growth prospects, which may help to offset what could be a slower macro growth environment. This led to investments in companies with strong balance sheets and good access to capital, which may allow them to take advantage of acquisition opportunities.Real Estate – performance? Overweight to industrial REIT’s has helped performance: The manager remained positive on the future prospects of industrial REITs, particularly logistics facilities and warehouses that are benefiting from continued growth in online retailing. An overweight position in Prologis, an owner of industrial distribution and retail properties, has contributed to relative performanc. The company has significant exposure to overseas markets, particularly Europe, where more than a quarter of its properties' net asset value is located. In fact, Prologis has the greatest exposure to Europe of all U.S. REITs. Signs of macroeconomic stability and improving capital markets in continental Europe during the period were a boon to Prologis stock, helping it to outperform.? Position in a small-cap hotel has helped performance: The manager remained slightly underweight in the hotel and lodging sub-industry, yet elected to hold an out-of-benchmark position in Chesapeake Lodging Trust. The small-cap hotel owner issued additional equity during the recent period, which Wald felt could help the company grow its asset base given the high quality nature and growth potential of its property portfolio. Limited share liquidity had been a head wind for the stock, but the recent equity issuance helped to alleviate concerns and shares responded favorably.Outlook? James Morrow believes that opportunities for dividend-paying stocks exist across the market; he is increasingly optimistic on health care and technology, while being less optimistic on areas such as utilities and REIT’s, where he believes that valuations may be stretched? Pramod Atluri expects the U.S. economy to maintain a modest level of economic growth, with growth being between 1% and 2% in the first half of 2013, and between 2% and 3% in the second half. He believes that interest rates should continue to track higher. In particular, he is positive on housing and expects this sector to continue its recovery.? Harley Lank observes that defaults have been low, and he expects them to remain below the long term average of approximately 5% over the next 12-18 months at least, given the vast amount of refinancing we’ve experienced in the market post-crisis. The base case projection is 2013 will be a coupon-clipping year so mid-single digit return expectations seem reasonable. However, if the market were to pull back, the high coupon (~ 8%) can offset possible capital losses.? Samuel Wald believes that REIT valuations remain somewhat elevated relative to history. On the other hand, when valued relative to other income-oriented asset classes, such as U.S. government bonds, REITs appear to be attractively valued relative to history. Numerous tail winds could be supportive of future REIT performance, including positive commercial real estate fundamentals, REITs' continued access to equity and debt capital, and attractive dividend yields that could grow.Thanks for your continued support.? Any other feedback on these emails are always welcomed.?JenniferYour Fidelity Investments team Jennifer Cheung, District Vice President Tel: (416) 833-2813 E: Jennifer.Cheung@ Brad Downey, District Sales Associate Tel: (416) 217-7418 E: Bradley.Downey@Worried about fixed income?? Click HERE for a solution to increase yield and help hedge against the possibility of rising rates without taking on more risk.Looking for greater foreign content or U.S. exposure? Click HERE for embedded foreign content in balanced funds or U.S. focused funds. fidelity.ca fidelity.ca/fundcodes ................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- wordpress passing data between pages
- wordpress business templates
- wordpress rss feed not working
- wordpress jquery is not defined
- create wordpress blog
- wordpress roles editor
- wordpress full rss feed
- wordpress rss feed settings
- wordpress rss feed plugin
- wordpress display rss feed
- wordpress rss feed link
- wordpress rss feed to post