Countries who depend on exports and face potential big tariff increases might not be the first places most investors would look for income-producing investments. So why does a veteran Fidelity portfolio manager believe that Canadian bonds and dividend-paying stocks may offer the most attractive income opportunities available in the second quarter of 2025?
Adam Kramer manages Fidelity® Multi-Asset Income Fund (
Kramer believes that is exactly what has happened to dividend-paying stocks and bonds of Canadian utility, pipeline, and other companies right now, and that’s pushing their prices down and their yields up. "Many bonds and fixed-to-floating preferred stocks of Canadian pipelines, utilities, and select high-quality banks currently offer attractive yields for reasonable duration," he says.
Of course, low prices and high yields can also be a sign that a company is in serious financial trouble and a bad risk for investors, but Kramer says that’s not always true. Instead, he believes many low-priced, high-yielding Canadian assets now may have much brighter prospects than they did even a few months ago.
Over the past 3 decades, Canada’s economy has become increasingly dependent on the export of natural resources and manufactured goods such as cars to the US. More recently, it’s also become much less able to grow and compete globally.
Now, Kramer believes the changing relationship with the US leaves Canada’s government with no choice but to reform its economy, cut taxes, and become more competitive in order to seek new markets for its exports. He believes that a political consensus is emerging that favors reforms that could eventually restart economic growth and raise asset prices. He says that Canada may have been in recession even before the tariff threat appeared and has been "starved for investment and capital spending," so he believes even modest reforms could have the potential to yield attractive results. “All you need is a little bit of a difference, of things going from horrendous to a little better to really make a difference in valuations and the sentiment, because there's been so much bad news,” he says.
To be sure, Kramer, a Montreal native, recognizes the disruption that tariffs could pose to Canadians and is trying to find areas that have been punished by fears of tariffs, but which may not in fact be exposed to them.
Income opportunities elsewhere in the Americas
Kramer has also seen income opportunities in the US, including convertible bonds, high-yield bonds, and bank loans.
Convertible bonds can provide an alternative way for investors to access other companies or investment themes without buying their stocks and while also collecting a coupon.
Kramer also likes high-yield bonds. “These are short-duration, high-yielding bonds from companies with low levels of debt.”
“I also like bank loans because I have been able to get attractive yields with duration of less than 1 year, but I want to focus on those that really have high coupon yields."
Kramer also sees opportunity in some emerging-market bonds such as local currency Brazil sovereign bonds and US dollar-denominated Mexican oil company bonds. "In the case of Brazil, the central bank has regained some credibility, and the next catalyst could be the 2026 election," he says.
How and why to seek these less-familiar income opportunities
The reason for seeking opportunity in these less-familiar income investments is because these investments may deliver higher potential yields than more familiar stocks or investment-grade corporate bonds and they may also be available to purchase at discount prices. "Market conditions constantly change and the investments that deliver the highest returns today may not be the ones that do so next month or next year," says Kramer. "For a long time it was stocks, stocks, stocks. This year, though, I believe the best-performing asset class is likely to be something other than stocks."
Go pro
Professional management and research can help you manage the risks that come from venturing into less-common income investments. Investors may want to consider gaining exposure to multi-asset income strategies as ways to diversify away some of the risks posed by having concentrated exposure to a single asset class. You can do this by researching professionally managed mutual funds and running screens for these products using the Mutual Fund Evaluator, ETF/ETP Screener on Fidelity.com. Below are the results of some illustrative mutual fund screens that invest in multi-asset income strategies (these are not recommendations of Adam Kramer or Fidelity).
Mutual funds
Fidelity® Multi-Asset Income Fund (
BlackRock Multi-Asset Income Portfolio (
Invesco Multi-Asset Income Fund (