Fidelity Capital & Income (FAGIX)
Fidelity Capital & Income (FAGIX) is a fund that combines high-yield bonds paired with a small allocation to equities to achieve fine results.
Managed by Mark Notkin since 2003, FAGIX relies on fundamental research to pinpoint opportunities in distressed companies. This Fidelity fund holds mostly corporate bonds, but mixes in some individual stocks to the tune of about 16% of the portfolio.
The results over time have been solid, with the fund up an annualized 18.7% over the past five years. This year, bond funds are up only slightly or even in negative territory, but FAGIX is up 7.6% YTD; its performance actually is correlated to the performance of equities over time.
Those results have attracted $9.7 billion in assets — more than either XLU and VYM.
The average maturity of the bond portfolio is 6.1 years and duration is 4.2 years. Current top holdings include debt from GMAC, HCA Holdings (HCA), Energy Future Holdings, Ally Financial (GOM) and Momentum Performance Materials.
FAGIX currently has a TTM yield of 4.9% and an SEC yield of 4.4%. Expenses are 0.73% annually.
Bill Wysor is the editor of The Relevant Investor. As of this writing, Bill Wysor was long FAGIX.