The investment landscape is never static, but the flow of crosscurrents in mid-2026 seems unusually dynamic. The Iran conflict and closing of the Strait of Hormuz have constricted global flows of oil, natural gas, and important inputs to the agricultural and industrial sectors—stoking inflationary pressures across the economy. As inflation has moved up, so have yields on long-term Treasurys. The focus of the Fed, meanwhile, has been shifting away from possible rate cuts and toward possible rate hikes.
A shifting investment landscape makes for a happy hunting ground for Adam Kramer, lead manager of Fidelity® Multi-Asset Income Fund (
“In my opinion it’s always a good time to be an investor in multi-asset income, because there are always going to be opportunities no matter where the US is in the business cycle,” Kramer says. “Every year, investors can find different asset classes that rightly and wrongly price risk.”
A Fidelity fund manager's outlook on income investing today
The fund seeks to maximize income and return relative to the amount of risk taken (i.e., volatility and price drawdowns), aiming for stock-like returns but with lower risk. Kramer says that historically, roughly half of the fund’s return has come from income and the rest from price appreciation.
Recently, Kramer has seen a strong economy in the US powered by the artificial intelligence (AI) boom. “The US and world are in the midst of an infrastructure build-out that probably hasn't been seen since the railroads, or possibly in the history of the world,” he says. That positive backdrop has been good for many investments—a rising tide lifting most boats. But it can also shift the opportunity set for a bargain hunter like Kramer, who looks for investments that trade at a discount or that have too much bad news priced in.
For example, Kramer observes that for the first time in the fund’s history, it recently held no allocation to corporate investment-grade bonds, due to their relatively high valuations. Valuations on corporate bonds are generally measured with credit spreads—the extra yield they pay over Treasurys of similar maturities. Kramer says that at recent levels, these spreads are narrower than they’ve been more than 95% of the time in the history of the corporate investment-grade market. Because there is little scope for those spreads to narrow further, he feels there's limited potential for price appreciation in the corporate bond market from recent levels.
The fund also recently held relatively little in high-yield bonds. This asset class is normally a staple for Fidelity® Multi-Asset Income, due to its relatively high yield and relatively low duration, or interest-rate sensitivity. Kramer notes that as with investment-grade bonds, credit spreads on high-yield bonds were recently in the narrowest 5% of their historical range. In part, those narrower spreads also reflect changes in the pool of corporate borrowers. The average high-yield corporate borrower today is more creditworthy than the average high-yield corporate borrower a decade or more ago.
In short, corporate bonds—both investment and sub-investment grade—don’t appear underpriced to Kramer at recent levels and so haven't been attracting his attention.
3 big income investing ideas now
Still, Kramer and his team have been able to identify potential opportunities in the recent environment—using their bottom-up process to navigate the complex market backdrop and identify potential mispricings. That process has recently led them to the following 3 areas, in particular.
1. Convertible bonds: A unique asset class that's been shining
Kramer, a convertible bond maven who is also co-manager of Fidelity® Convertible Securities (
Like a bond, convertibles pay interest quarterly and promise to repay bondholders at par at maturity. But the bonds can be converted to the issuing company’s stock at a predetermined ratio. Thus, if the stock rises significantly in price, the bond may trade more like a stock and potentially be converted into the company’s common shares.
Dynamics in the convertibles market have been so favorable in recent years, that Kramer has taken to calling it the "golden age" for convertible bonds. Around one-third of the market will leave the asset class in the next 2 years, Kramer estimates. Some of these may mature as a traditional bond would, but many may exit the market because they convert into stock. These may be replaced by a stream of new issues with lower sensitivity to the issuer's stock price and lower valuations—many of them technology companies that are raising capital to finance their AI infrastructure build-out. Alphabet (
2. Preferred stock backed by cryptocurrency
Preferred shares typically pay a fixed quarterly dividend and are senior to common stock but junior to bonds in a company’s capital structure. Plain vanilla preferred shares, on average, aren’t a screaming value today, in Kramer’s mind. But digging deeply, he believes he's found unique potential opportunity in the form of crypto-linked perpetual preferred stocks, issued by bitcoin and ethereum treasury companies. With just a year of history, he calls them “probably the biggest innovation I’ve seen in my 26 years in fixed income markets.”
Also called “digital credits,” these preferred shares have paid yields as high as 12% to 16%, which may be distributed as frequently as monthly, biweekly, or even daily. Some of these preferred shares pay floating-rate interest, which essentially eliminates interest-rate risk. And the issuers' significant holdings in bitcoin and/or ethereum have created a collateral buffer that has remained substantial even after large swings in crypto prices. Finally, distributions paid on the preferreds may be treated as a return of capital rather than as ordinary or qualified dividends, which can offer more favorable tax treatment.
Kramer believes the combination of distressed-asset type high yields, solid financial capacity to pay dividends, and strong balance sheet protection reflect the novelty of crypto-backed preferred stock. “I'm seeking areas that are misunderstood, mispriced, and where investors can get paid to wait,” he says.
3. Stocks for dividends and rare resources
The disruption in the Middle East has hampered supply chains but also created some new potential opportunities. Kramer reckons that the oil tanker industry, a sector he’s analyzed since 2002, could be one of these. Even prior to 2026 developments in the Hormuz Strait, an industry once known for its dramatic boom-bust cycles had been cleaning up its financial act. Certain tanker companies had paid down debts, cut costs, increased free cash flow, and boosted dividend distributions.
Now, the drawdowns of global oil inventories could be setting up a profound opportunity. "Once there is peace in the Middle East, many countries may need to rebuild their oil inventories," says Kramer. Some countries may even want to increase inventories above where they were pre-2026, to guard against future supply disruptions. “I believe the world may undergo the biggest oil inventory rebuilding cycle ever seen,” he says. Recent portfolio holdings that have illustrated this thesis include oil tanker companies International Seaways (
Rare and critical metals are another area in which Kramer has been hunting. He thinks he’s found compelling supply-demand dynamics in the market for tungsten. Prized for its unusually high melting point, tungsten is widely used in defense, high-temperature industrial applications, and specialized semiconductor manufacturing processes. Due to its unique properties, Kramer believes the metal could eventually find broader applications in emerging fields such as space exploration and nuclear fusion. Worldwide supply has been dominated by China, Russia, and North Korea—a setup that has made it difficult for much of the world to access tungsten supply. Kramer thinks the imbalance of supply and demand could benefit companies that are able to bring tungsten supply to the global market. For example, Almonty Industries (
Income investing at different points in the business cycle
Investors can’t control what the market will do or predict how shifts in geopolitics, interest rates, and inflation will unfold. Kramer has found that focusing on the concrete task of identifying mispricings—rather than the amorphous task of predicting the future—can provide the deftness and flexibility to navigate a fluid, changing environment.
Or as Kramer, a Canadian, likes to put it, “I skate to where the puck is, not where it has been.”