Fidelity MoneyBuilder Corporate Bond: December 2025 fund update

• The fund provides investors with exposure to corporate bonds, mainly those with investment grade credit ratings, offering diversification to a portfolio focused on shares

• Kristian Atkinson took over as lead manager on 1 October 2023 and is joined by co-manager Shamil Gohil

• The fund focuses on providing income and losing less than peers during bond market falls

• The fund is on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Fidelity MoneyBuilder Corporate Bond fund aims to provide a relatively steady income and a small amount of growth, without taking excessive risks, by investing in bonds. The three-pillar approach adopted by the managers means this fund can perform a bit differently to peers.

We think the fund could help to diversify an investment portfolio focused on shares, as well as being a useful addition to a portfolio focused on providing income.

Manager

The fund is co-managed by Kristian Atkinson and Shamil Gohil.

Atkinson joined Fidelity in 2000 and worked as a credit analyst until 2013. During his time as an analyst he covered multiple areas of the bond market, including investment grade, high yield and emerging market debt. He was promoted to fund manager in 2013 and became co-manager of this fund in 2019. Gohil joined Fidelity in 2023 and has over a decade of experience as a bond manager, having worked at PIMCO, BlackRock and most recently HSBC Global Asset Management. He became a co-manager on this fund in March 2023.

Atkinson and Gohil benefit from Fidelity's extensive in-house research team to help them put together the fund. The duo manage other bond funds too, but they’re supported by a well-resourced fixed income team at Fidelity, so we feel they can comfortably handle their other responsibilities.

Process

Most bond managers analyse the bigger economic picture and Atkinson and Gohil are no different. But we also think a strength of the team is their skill at analysing bond-issuing companies. It helps them determine which bonds are the most attractively priced and should be included in the fund. The managers invest in bonds issued by companies from all over the world, but investors should expect the fund to retain a bias towards bonds issued by UK companies.

Atkinson and Gohil adopt a three-pillar approach. They aim to provide a decent level of income, with low volatility compared to peers, and perform differently to funds focused on shares. This tends to lead them to invest differently to some peers, with less invested in bonds issued by companies closely linked to the government and more in secured bonds.

Secured bonds are those where borrowers have to post security for a loan in the same way you might use a house as collateral for a mortgage. The investor has something to rely on if the borrower doesn't pay money owed to bond holders. The managers also make use of their ability to invest in lower-risk government bonds and can invest in derivatives, which adds risk. The fund is well diversified, so no single area should have a significant effect on performance.

The managers decreased investments in secured bonds a little over the last year, with around 23% of the fund now invested here. The managers also increased the amount in bonds issued by banks. They sold some bonds issued by companies in the utilities and transportation sectors.

In terms of credit quality, the managers have broadly moved up the credit rating scale (bonds less likely to default on their debts). They reduced the amount invested in BBB rated bonds and increased the amount in AAA and AA rated bonds. They also reduced the amount in higher-risk high yield bonds.

More recently, the managers increased the amount of cash in the fund. Bonds issued by companies have performed well recently and the managers believe there is less value on offer. If bond prices fall, they want to have cash available to buy bonds at cheaper prices. This fits with the managers’ style of trying to fall less during a bond market wobble.

Culture

Fidelity is privately owned. This independence should mean it can focus on the long-term interests of investors rather than short-term shareholder demands. The managers are incentivised based on the longer-term performance of the fund. We think this is a positive as it aligns their interests with those of their investors. They do well when their investors do well.

ESG Integration

Fidelity implements a structured engagement program which allows it to be systematic in its engagement on environmental and social issues. The firm votes where it is possible to do so and quarterly voting reports are posted online, complete with rationales for votes against management and abstentions.

In June 2019, Fidelity launched its own proprietary ESG (Environmental, Social and Governance issues) ratings tool. It scores thousands of companies based on their ESG credentials on a forward-looking basis, with investment analysts tasked with the job of ensuring the ratings are up to date. The ratings system was later updated to include an assessment of each company’s ability to manage negative externalities. Fidelity also developed a climate rating which highlights companies where engagement is most necessary if the firm is to achieve its aim to halve portfolio emissions by 2030 and reach net zero by 2050.

While Fidelity has made strides forward at the firm level, we don’t think this has fully fed through to the fund level. Although there is plenty of ESG information available to all Fidelity fund managers, we’re not convinced they all put it to full use.

This fund used to have a more formalised ESG objective, however this fund did not achieve a label as part of the UK’s Sustainable Disclosure Requirements framework. As a result, the previous formal restrictions no longer apply to this fund. That said, it’s clear that ESG risk assessment remains a key part of the idea generation process for bonds to make it into the fund.

Cost

The fund has an annual ongoing charge of 0.55%, but we’ve secured HL clients an ongoing saving of 0.20%. This means you’ll pay a net ongoing charge of 0.35%. The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside an ISA or SIPP. The HL platform fee of up to 0.45% per year also applies, except in the HL Junior ISA, where no platform fee applies.

Please note the fund's charges can be taken from capital rather than income. This increases the yield but reduces the potential for capital growth.

Performance

Since Atkinson became a manager on this fund at the start of 2019 to the end of November 2025, it’s underperformed the IA £ Corporate Bond sector average, returning 11.46%* compared with 15.84%. It’s outperformed its benchmark though, which returned 10.80% over the same period. Past performance is not a guide to future returns.

We think the managers are relatively cautious investors, so ordinarily the fund is managed conservatively with a focus on companies less likely to default on their debts. This means it could lag the benchmark during good times, but provide some shelter when markets fall. This won’t be the case all the time though, such as during 2022 when the fund underperformed the peer group and benchmark during a period where bonds generally lost a lot of value.

Over the last 12 months, the fund has underperformed peers, returning 5.46% compared to the sector average return of 6.03% and a benchmark return of 5.78%. Compared to the benchmark, the fund’s higher than average yield helped performance. But individual bond selection was a negative. Investments in bonds issued by Thames Water were a headwind, as was not owning bonds issued by the European Investment Bank and the International Bank for Reconstruction and Development. That said, investments in bonds from Metrocentre Finance and UPP adding value.

Their duration positioning also hurt performance over the year. Duration is measured in years and reflects how sensitive the fund is to interest rate changes. The higher the duration figure, the more sensitive the fund is to interest rate changes. Prices of government bonds have fluctuated over the year linked to wider events such as tariffs. With expectations about future interest rate cuts falling too, it’s been a tough area to try to add value. The managers have aligned the fund’s duration with the benchmark, which is 5.5 years at 31 October 2025.

As of 31 October 2025 the fund had a yield to maturity of 5.4%, though yields are not a reliable indicator of future income and income isn’t guaranteed.