Fidelity New Markets Income Fund
- Ticker: FNMIX
- Assets: $4.9 billion
- Category: International Bonds
- YTD Performance: -4.5% vs. 23.1% for the S&P 500
- Expense Ratio: 0.87%
Let’s face it, there aren’t a lot of bond investments that are incredibly attractive out there. But for income-oriented investors looking for the best Fidelity funds right now, one opportunity to consider is the Fidelity New Markets Income Fund (FNMIX), which consists largely in emerging-market debt.
Investing in emerging markets is always difficult and frankly hasn’t been very lucrative in 2013 as the domestic equity market has been on a tear.
However, if you’re talking about a play for 2014 and beyond, then you may want to consider taking a position in the Fidelity New Markets Income Fund – particularly if you have an eye on yield.
After all, across the last 10 years this fund has delivered 9.5% returns annually – almost on par with large-cap equity – thanks to big returns from the underlying debt securities. Right now, for instance, FNMIX has a 30-day yield of over 5% thanks to debt in Eastern European governments, Brazilian oil giant Petrobras (PBR) and other emerging-market instruments.
Right now about 50% of the fund is in sovereign debt, with another 40% in corporate and agency debt. A tiny fraction is in equities and U.S. Treasuries, with about 9% in cash as of this writing.