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Fidelity Moneybuilder Income Fund

4 minute read

We take a closer look at the Fidelity Moneybuilder Income Fund.

Who's it for? All investors

When investing in bonds, it’s important to understand where your money is going. Bonds are a way of lending money to companies (known as corporate bonds) or governments (known as gilts in the UK).

Corporate bonds are issued by companies as a way of raising capital which is then ploughed back into the business – as a bond investor you’re effectively lending the company money which it will then pay back with interest, known as a coupon (which translates into a yield on your investment). These bonds generally have a market value during their life if you want to sell them, in the same way that shares have a market value.

As a result, it’s of utmost importance that the companies you lend money to will pay it back. You need to put the work in, to assess that risk. When you invest in a bond fund, you need to be certain that the team managing that fund carry out this work for you. The team at Fidelity certainly have an interesting approach to doing just that.

Defensive

The team that manage the Fidelity Moneybuilder Income Fund have what we would call a ‘defensive’ style to investing. To understand this, we need to remind ourselves of the risks of investing in bonds. There is always a risk that the companies you lend money to will not be able to pay you back. The companies with the highest risks will pay a higher rate of interest on their bonds, to compensate you for the risk you are taking. Lower risk companies will pay lower interest.

Learn more about investing in bonds.

In an attempt to manage risk, the team at Fidelity look to find the highest quality companies to invest in. They also look to spread risk by limiting how much they invest in any one part of the market. The result is a fund that aims to deliver a steady income through all market environments – both the good times and the bad. However, the income is not guaranteed and the value of your investment can fall, such that you might get back less than you invest.

The team at Fidelity

We like this fund because it’s managed by two experienced managers, Sajiv Vaid and Kristian Atkinson, and has generally delivered consistent performance over time. The fund combines the fund managers’ view on global markets and economies, together with a strong team of analysts looking at each individual company.

If you are looking to add a bond fund to your investment portfolio, the Fidelity Moneybuilder Income Fund could be worth considering.

Overall returns from the best bond funds tend to be lower than the top funds that invest in shares. But there are other bond funds on the Barclays Funds List, in addition to the Fidelity Moneybuilder Income Fund. Some of these invest in different parts of the bond market and offer the potential for different yields and total returns. Find out more information on these funds.

To diversify your investment, you may like to consider our own Barclays Ready-Made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified one-stop solution for investors. Ready-Made Investments are not the only funds that we offer and they won’t be appropriate for everyone.

Whichever option you choose, you must accept that all investments can still fall in value as well as rise and you might get back less than you invest.

Investments can fall in value. You may get back less than you invested. These are our current opinions but the future, as ever, is uncertain and outcomes may differ. Past performance of the fund and its manager are not a reliable indicator of their future performance.

We don’t offer personal investment advice so if you’re unsure you should seek that independently.

Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.

These are our current opinions but the future, as ever, is uncertain and outcomes may differ.

Plan & Invest is a service which creates and manages a personalised Investment Plan just for you. Whether your long-term goal is your child’s university education, retirement or just building a nest egg, all you have to do is tell us a bit about yourself and then, if your application is successful and you’re ready to invest, let our experts select and manage your investments (minimum investment is £5000).

Read the Assessment of Value report [PDF, 683KB] for funds run by Barclays.

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The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances.

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