HEAD-TO-HEAD: Blackrock versus Fidelity

123456

Mara Dobrescu, Morningstar

Introduction

 Investors globally have turned sour over most asset classes, something especially true in the European investment grade bond category.

Year-to-date to end-September, European investment grade corporate bonds have seen outflows of €8.9bn ($10.1bn), according to Mara Dobrescu, Paris-based manager research director for fixed income strategies at Morningstar.

“Generally, most funds in the euro bond category have seen outflows, but it is most pronounced in the European investment grade bond space,” she said.

In comparison to other European bond categories, Euro high yield bond funds saw outflows of €3.6bn during the same period, while diversified bond funds, which invest in both corporate and government bonds, have had outflows of €1.8bn.

European government bond funds, however, have seen slight inflows of €1.8bn this year.

Dobrescu added that European investment grade corporate bond funds is the third most avoided category year-to-date, with the other two being US dollar high yield and global high yield.

“You can see that investors have really been reacting to a rising risk aversion and the concern around a higher interest rate environment,” she said.

Against this backdrop, Dobrescu compares two European investment grade products: The Blackrock Euro Corporate Bond Fund and the Fidelity Euro Corporate Bond Fund.

Source: Morningstar, FE Analytics

*Trailing three years to 8 November

**Year-to-date to 8 November

123456