The FF Emerging Market Corporate Debt fund, managed by Andrei Gorodilov, will invest in between 150 and 200 bonds issued by corporations in Russia, Mexico, Turkey, Brazil, South Korea and China.
The Luxembourg-domiciled Sicav will offer investors exposure to growing domestic demand in emerging markets, resulting from the expanding middle class in these economies, Fidelity said.
According to the firm, most emerging markets corporate bond funds are currently tied to the financial and commodities sectors, but the US-denominated portion of the market now rivals other well-established fixed income types.
Gorodilov said: “The current EM corporate universe presents a well-balanced investment grade and high yield opportunity set, with a broadly diversified regional and country universe. Even with the large returns seen historically, we still expect the asset class to appeal to investors, mainly thanks to income-generation, although selected capital appreciation opportunities may still present themselves.”