Fidelity International announces the launch of the Fidelity UK Gilt Fund, a new actively managed strategy designed to provide investors with exposure to high-quality UK government bonds while seeking to enhance returns through a highly active and macro-driven approach.
The fund aims to combine the defensive characteristics of gilts with the return potential of active management, offering investors a core portfolio building block with high liquidity and transparency. It will be managed by Mike Riddell, alongside co-portfolio managers Tim Foster and Ravin Seeneevassen. The strategy is supported by Fidelity’s extensive fixed income resources, including dedicated macro research, quantitative analysis, credit research and trading capabilities across global markets.
Mike brings extensive experience in UK government bond investing, having previously managed gilt funds at Allianz and M&G, where he delivered attractive excess returns over their respective benchmarks during his tenure.
The launch comes at a time when the UK rates environment is undergoing a structural shift. Gilt yields remain elevated relative to the post-global financial crisis period, while uncertainty around the Bank of England’s policy path, fiscal dynamics and macroeconomic outlook is creating opportunities for active investors.
The investment approach focuses on identifying macro themes driving growth and inflation and translating them into high-conviction positions across duration, yield curve, inflation and cross-market opportunities. The fund will seek to generate consistent excess returns through a disciplined portfolio construction process and robust risk management framework, targeting 50 basis points of gross outperformance per annum over a rolling three-year period.
Dennis Pellerito, Head of Wholesale, Fidelity International, said: “UK gilts are reasserting their role as a core allocation for clients navigating an uncertain macroeconomic backdrop. This fund combines the defensive qualities of government bonds with the strength of Fidelity’s active fixed income capabilities, leveraging our global platform to identify opportunities across the market. With Mike Riddell’s extensive experience in gilt investing, we believe the strategy is well positioned to deliver both resilience and enhanced return potential for clients.”
Mike Riddell, Portfolio Manager, Fidelity International, added: “The UK gilt market is entering a more dynamic phase. Elevated yields, shifting rate expectations and ongoing macro uncertainty are creating pricing inefficiencies across the curve. At the same time, supply dynamics – including a reduction in long-end issuance – may provide additional technical support to the asset class. This environment is well suited to an active approach, where we can selectively express views on duration, inflation and relative value to generate consistent excess returns for investors.”
