Fidelity Global Investment Grade Bond ETF Series L Trust · NEO:FCIG

Fidelity Global Investment Grade Bond ETF Series L Trust — Fidelity Investments Canada ULC — Focus 2023 Palm Beach

21 slides from Fidelity Global Investment Grade Bond ETF Series L Trust's conference presentation, October 2023

  1. Slide 1: CIO insights: The evolving market landscape

    CIO insights: The evolving market landscape Andrew Marchese Chief Investment Officer and Portfolio Manager October 2023 © 2023 FIDELITY INVESTMENTS CANADA ULC 629627-v2023926 FOR ADVISOR USE ONLY

  2. Slide 2: Can the profit story endure?

    Can the profit story endure? The market has reached an important junction in the macro backdrop and valuation 2 © 2023 FIDELITY INVESTMENTS CANADA ULC 629627-v2023926 FOR ADVISOR USE ONLY

  3. Slide 3: Four pillars of the equity market

    Four pillars of the equity market Earnings Interest rates Liquidity Valuation Source: Fidelity Investments Canada ULC. 3 © 2023 FIDELITY INVESTMENTS CANADA ULC 629627-v2023926 FOR ADVISOR USE ONLY

  4. Slide 4: Executive summary

    Executive summary Corporate profit backdrop has proven to be no worse than consensus forecasts set out 15 months ago. Market consensus forecasts point to accelerating growth in 2024. Market has priced in a meaningful amount of this, with multiple expansion in 2023. © 2023 FIDELITY INVESTMENTS CANADA

  5. Slide 5: Executive summary

    Executive summary Equity breadth is somewhat narrow, and leadership is not synonymous with a new bull market. © 2023 FIDELITY INVESTMENTS CANADA ULC 629627-v2023926 5 FOR ADVISOR USE ONLY

  6. Slide 6: Executive summary

    Executive summary Unemployment may be the single most important macroeconomic metric to observe going forward, and it will determine the fate of the price of various asset classes and interest rate policy. © 2023 FIDELITY INVESTMENTS CANADA ULC 629627-v2023926 6 FOR ADVISOR USE ONLY

  7. Slide 7: Executive summary

    Executive summary Valuation disparities are becoming large again, setting up opportunity for changes in asset allocation and leadership. © 2023 FIDELITY INVESTMENTS CANADA ULC 629627-v2023926 7 FOR ADVISOR USE ONLY

  8. Slide 8: Global economic cycle

    Global economic cycle Recession India, Mexico Japan U.S., Australia, China Canada, Korea, + Brazil Economic growth Early Mid Late – Relative Eurozone performance of economically U.K. sensitive assets Green = Strong The diagram above is a hypothetical illustration of the business cycle, the pattern o

  9. Slide 9: How restrictive is monetary policy?

    How restrictive is monetary policy? U.S. monetary policy 9 8 7 Restrictive Restrictive 6 5 Restrictive 4 Restrictive 3.19 3 2.78 Neutral 2.26 2 1.75 1 1.14 1.31 0 -1 Accommodative -2 Real Fed policy rate Accommodative -3 SF Fed Proxy FF real rate (core-PCE) -4 Real FF curve (TIPS forward curve) Acco

  10. Slide 10: Are we really out of the economic woods?

    Are we really out of the economic woods? Recession warning – Inversions like this tend to end with economic contraction 6 4 2 0 -1.1864 -2 U.S. 3m-10y yield curve -4 1962-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-2019 Source: Bloomberg. Data as at September 8, 2023. Shaded areas indicate U.S

  11. Slide 11: Are we really out of the economic woods? (cont'd)

    Are we really out of the economic woods? (cont’d) Peak yield curve inversion and time until disinversion 120 9/10/1973 100 5/3/2023 Days until disinversion 80 10/18/1966 12/10/1980 60 3/7/2007 40 7/23/1969 3/12/1980 8/28/2019 20 6/9/1989 8/23/1974 1/2/2001 2/26/2020 2/16/1982 0 -4.0 -3.5 -3.0 -2.5 -

  12. Slide 12: U.S. unemployment

    U.S. unemployment 4 18% 3 16% 2 14% 1 12% (% - %) 0 10% -1 8% -2 6% -3 4% -4 2% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Unemployment rate (RHS) Market yield on U.S. Treasury Securities at 10-year constant maturity, quoted on an investment basis-market yield on U.S. Treasury

  13. Slide 13: Corporate profit backdrop

    Corporate profit backdrop Stable forecasts, but where does the risk lie? S&P 500 Index Q2 ‘23 Q3 ’23 Q4 ’23 CY2024 $54.24 $241.52 EPS estimate (Sep. 8, 2023) $56.44 $57.75 (actual) (+11% YoY growth rate) $241.05 EPS estimate (Apr. 18, 2023) $54.39 $56.66 $57.96 (+10% YoY growth rate) • Historically,

  14. Slide 14: Market breadth lacking and small caps not participating

    Market breadth lacking and small caps not participating S&P 500 Equal Weighted Index 6,800 6,691 S&P 500 equal weighted index 6,540 6,600 38% 6,321 6,325 6,400 50% 6,211 6,200 62% 6,082 6,000 5,800 5,922 5,919 5,600 5,611 5,627 5,400 5,523 5,200 4,000 5,241 5,000 2,463 2,801 5,077 3,000 2,260 2,058

  15. Slide 15: Market breadth lacking and small caps not participating (cont'd)

    Market breadth lacking and small caps not participating (cont’d) Small caps 2,459 2,400 2,030 Russell 2000 2,007 1,990 Russell 2000 P/E ratio 1,715 1,742 (profitable companies only) 1,642 1,695 1,200 21.8 22 S&P 500 20 18 15.6 P/E ratio 15.1 16 14 600 12 10.8 10 10.1 8 Apr-12 Apr-13 Apr-14 Apr-15 Ap

  16. Slide 16: Market leadership

    Market leadership Profit expectations are high for “risk on,” 12-month EPS 12-month revenue as profit growth Sector: S&P 500 Index YTD return growth (est.) growth (est.) estimates argue for reacceleration of Info. tech. 21.2% 9.9% 6.2% business conditions Comm. services 16.0% 21.3% 3.4% and valuatio

  17. Slide 17: Valuation

    Valuation Market P/E multiple has expanded five points to 20x during 1 2023, which is reasonable on a long-term basis, assuming historical equity risk premium and long-term historical growth, but is expensive based on the current real-yield environment. 2 The market is implicitly betting on lower in

  18. Slide 18: Valuation (cont'd)

    Valuation (cont’d) 30-year U.S. treasury total return relative to S&P 500 and NASDAQ 0.7 0.7 0.6 Recession 0.5 0.6 0.4 0.5 0.3 0.4 0.2 0.3 0.10 0.09 0.08 0.2 0.07 0.06 1980 1985 1990 1995 2000 2005 2010 2015 2020 US benchmark 30 years DS govt. index – Total return index/S&P 500 composite (LHS) US be

  19. Slide 19: Valuation (cont'd)

    Valuation (cont’d) S&P 500 earnings yield minus three-month U.S. Treasury yield 10% S&P 500 Earnings Yield minus 3-month 8% U.S. Treasury Yield 6% 4% 2% 0% -2% -4% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Source: Bloomberg, as at August 31, 2023. 19 © 2023

  20. Slide 20: Recap

    Recap Unbalanced markets lead to opportunities: look for opportunities in 1 securities and asset classes that have lagged and valuation has not priced high expectations. Think contrarian when deploying new capital. Factor-based leadership should continue to persist until global central 2 banks show

  21. Slide 21: Important notice

    Important notice For advisor use only. No recipient is authorized to pass this communication on to any other person whatsoever or reproduce it by any means without the prior written consent of Fidelity. Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated

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