‘Idiosyncratic risk’ will be a crucial focus for fixed income investors over the course of 2023, argues Fidelity International portfolio manager Kris Atkinson in this video interview for Portfolio Adviser.
“We are moving from an environment where interest rate volatility is determining the performance of risk assets and into the next phase of the cycle, where the impacts of this extreme monetary tightening we have seen globally start to feed their way through to the real economy,” he tells Portfolio Adviser editorial director Julian Marr.
Atkinson, who co-manages Fidelity’s Sustainable MoneyBuilder Income portfolio with Sajiv Vaid, continues: “The next phase is really about idiosyncratic risk. It is about doing your homework to understand which credits are going to be most impacted by the slowdown in growth, whose profitability is going to be most at risk and, of course, on a regional basis, where we see the most opportunity.”
Portfolio positioning and focus
Atkinson goes on to discuss how the portfolio is positioned as a result, investment opportunities the team have identified, the additional skills needed to analyse asset-backed securities and his thoughts on taking over as lead manager on the fund, when Vaid retires in September.
You can view the whole video by clicking on the picture above, while the timecodes for each question are set out below:
00: 24 2022 was a tricky time for bond investors, to say the least, what lessons did you take from it?
01:58 Looking ahead, as a bond investor, how are you planning to navigate 2023?
03:41 How are you positioned in the fund, then, and what opportunities have you identified?
08:12 Does the analysis of asset-backed securities require a different skill-set?
10:03 How do you feel about taking over as lead-portfolio manager in September?
