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Finding attractive income-generating real estate investments
Hear how portfolio manager Bill Maclay looks for income from a combination of bond and non-bond sources that offer attractive yields and less sensitivity to interest rates.
Income Investing: Where We Have Conviction
Portfolio Manager Bill Maclay recently favored real estate company bonds, especially CMBS.
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Key Takeaways
- Fidelity Portfolio Manager Bill Maclay has tilted Fidelity Advisor Real Estate Income Fund toward real estate bonds because they have been attractively priced and are senior in the capital structure compared with real estate equities.
- Among real estate bond categories, Maclay has favored commercial mortgage-backed securities (CMBS) in 2025, particularly single-borrower CMBS because they tend to have modest leverage, high-quality well-capitalized sponsors, and they also allow him to select specific property types that have durable cash flows.
- In addition to those credit characteristics of CMBS, Maclay says these below-investment-grade bonds have attractive credit spreads that may range from 3.5%-4%, providing an attractively high single-digit yield.
Learn more about Fidelity's income strategies managed by our featured speaker
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Views expressed are as of the data indicated, based on the information available at that time, and may change based on the market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.
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