Posted inHead To Head

HEAD-TO-HEAD: Alliance Bernstein vs Fidelity

FSA compares two global fixed income products: the AB Global Bond Portfolio Fund and the Fidelity US Dollar Bond Fund.
by Rupert Walker

123456

Introduction

Luke Ng, senior vice president of research at FE Advisory, argues that an investor’s choice of a global bond fund should largely be predicated on their outlook for the global – and especially the US – economy.

A stronger US economy might herald higher US interest rates, which would have a negative impact on funds with long durations: the prices of bonds with long maturity dates tend to move more for a given interest rate change than the prices of short-dated bonds.

“In this scenario, a defensive fund, with holdings concentrated in (high quality) short maturity bonds is the better option,” he said.

Alternatively, a weak US economy might prompt the Federal Reserve to cut interest rates, which would be a boon for funds invested in long-dated bonds.

FSA asked Ng to compare two US-denominated global funds that both aim to provide high returns, through a combination of income and capital growth, yet have adopted strategies at the opposite ends of the duration spectrum.

123456

Related Stories

FSA SPY

The FSA Spy market buzz – 25 April 2025

BlackRock’s optimism; Capital Group’s globalisation perspective; GSAM is supervising; Jupiter is running hard to stay still; Alphabet’s cash spigot; Silver linings; Nasdaq rallies and much more.

Part of the Mark Allen Group.