The Fidelity Funds - Asian High Yield Fund (A-ACC-USD) seeks to achieve income and long-term capital growth by investing primarily in sub-investment-grade (high yield) bonds issued by Asian corporations and governments, denominated in USD or other hard currencies.
Investment Objective
The fund aims to deliver high total returns — primarily through coupon income and some capital appreciation — by investing in a diversified portfolio of Asian high yield bonds. Issuers are predominantly from China, India, Indonesia, Hong Kong, and other Asian markets. The fund is actively managed, with the portfolio manager making credit selection, duration, and sector allocation decisions. Its benchmark is the ICE BofA Asian Dollar High Yield Corporate Plus Index.
Asian High Yield Market Overview
The Asian high yield bond market is dominated by Chinese property developers, Indonesian corporates, Indian conglomerates, and other high-yield issuers across the region. USD-denominated issuance from Asian borrowers has grown substantially, attracting global investors seeking yield pickup over US Treasuries.
The 2021–2026 period was characterised by extreme stress followed by gradual recovery:
- 2021 H2 — Evergrande crisis: China’s most-indebted property developer defaulted on its obligations, triggering a contagion across the China property sector and causing a historic sell-off in Asian HY
- 2022 — Compounded pressure: Global rate hikes by the Fed widened EM credit spreads further; Asian HY reached decade-low prices as multiple Chinese developers defaulted (Sunac, Kaisa, Fantasia and others)
- 2023 — China reopening: Post-COVID reopening sparked a relief rally; non-property Asian HY names (India, Indonesia) proved resilient
- 2024–2026 — Gradual stabilisation: As Fed rate cuts began and non-property Asian HY spreads tightened, carry income drove positive returns for survivors
NAV History
Chart shows 5-year NAV history with 50-day and 200-day moving averages. Data is illustrative — re-run scripts/fetch_asian_high_yield_fund.py to refresh with live data.
Portfolio Characteristics
Typical portfolio composition for an Asian high yield bond fund:
- China corporates (~35–45%): Non-property Chinese issuers (tech, consumer, industrials); reduced property exposure post-2022
- India & Southeast Asia (~25–35%): Indonesian resource companies, Indian conglomerates, Philippine banks
- Other Asia (~15–20%): Macau gaming, Hong Kong corporates, South Korea
- Duration: Shorter than investment grade, typically 3–4 years modified duration
- Credit quality: B/BB rated, with some CCC exposure; significant dispersion within the universe
Currency
This share class (A-ACC-USD) is denominated in USD. The fund invests in USD-denominated bonds, so Eurozone and Asian investors bear USD foreign exchange risk. Most Asian HY bonds are issued in USD (the hard-currency market), making the fund naturally USD-exposed at the asset level.
Risk Considerations
Key risks for an Asian high yield fund include:
- Credit risk: The primary risk — high yield issuers have elevated default probability. The 2022 China property collapse resulted in severe permanent capital impairment for holders of defaulted names.
- Concentration risk: Historically high weighting in Chinese property; diversification has improved post-restructuring but China still dominates the index.
- Liquidity risk: Asian HY bonds are less liquid than US or European HY; bid-offer spreads widen sharply during stress episodes.
- Interest rate risk: Lower than investment grade (shorter duration) but still present; USD rate moves affect funding costs for Asian borrowers.
- Political/regulatory risk: Sudden Chinese policy shifts (e.g., property sector deleveraging, tech regulation) can reprice entire segments of the portfolio.
Risk & Return Metrics
Share class: A-ACC-USD | ISIN: LU0286668453 | Data: synthetic (1305 trading days, annualised at 252 days/year)
| Metric | Daily | Annualised |
|---|---|---|
| Expected Return | 0.0009% | 0.24% |
| Risk (Std Dev) | 0.7744% | 12.29% |
| Metric | Value |
|---|---|
| First NAV | 14.1887 |
| Last NAV | 13.8132 |
| Total Return (period) | -2.65% |