Ian Spreadbury's long-standing and diverse experience in fixed-income markets, combined with his prudent risk management, historically underpinned our high conviction in Fidelity MoneyBuilder Income. Spreadbury has announced his intention to retire at the end of 2018, with lead management responsibility passing to his comanager Sajiv Vaid, who joined from Royal London Asset Management in 2015.
Vaid was brought on board with the clear intention to be Spreadbury's successor, and the two have worked together well over the past three years. Vaid seems fully indoctrinated in to the Fidelity fixed-income philosophy and process, and he is a worthy successor. However, the team was stronger with the both of them working together, and we believe that the loss of Spreadbury's macro input will be felt. Fidelity have also done little to mitigate key-man risk on this strategy.
Vaid's new comanager, Kris Atkinson, will be appointed to the fund in January 2019 and will need time to get up to speed with the portfolio whilst also maintaining his own portfolio management responsibilities on other strategies.
Atkinson joined Fidelity in 2000 as a research associate, became a credit analyst in 2001, and was promoted to senior credit analyst in 2010. He was named portfolio manager in 2013 and has managed global corporate-bond strategies since that time.
The strategy efficiently leverages Fidelity’s research, quant, and trading resources in order to construct a portfolio that is designed to generate income, be a long-term equity diversifier, and maintain a relatively low level of risk.
To achieve this, the managers are very much bottom-up-driven, with security selection and sector positioning as the key alpha drivers. They may also use asset allocation, duration management, and yield-curve positioning as additional levers.
Overall, we still think highly of this team and investment process. However, given the significant team changes afoot, a downgrade in the fund's Morningstar Analyst Rating to Silver from Gold is a better reflection of our degree of conviction at this stage.