The broader market suffered in 2022 as the Federal Reserve embarked on its rate-hiking campaign. Amid the tumult, the Fidelity Equity-Income Fund (FEQIX) outperformed the broader market with a total return of -5.07% – the result of portfolio manager Ramona Persaud’s search for value and quality.

“It was such a hard year for everyone,” she said. “I do think last year was a good example of highlighting the process.”

The fund shone as the Nasdaq Composite – whose Big Tech components were routed by higher interest rates – cratered 33.1%, and the S&P 500 shed more than 19%.

“Value is proven out through data over time,” she said. “We didn’t truly see it in the last decade, but value over long periods of time is your best alpha factor.”

The fund posted 3-year trailing returns of 18.71%, through April 4, according to Morningstar. The fund’s 5-year and 10-year trailing returns were 9.27% and 9.13%, respectively.

“She is looking for stocks with low expectations baked into them,” Robby Greengold, strategist for Morningstar Research Services, said of Persaud’s approach.

“A lot of the companies she buys have relatively high or stable profits and strong free cash flow generation,” he added. “She thinks that a portfolio of companies that are inexpensive, high quality dividend paying stocks should outperform on a risk-adjusted basis.”

FEQIX’s allocation toward blue-chip names that pay dividends such as JPMorgan Chase and Johnson & Johnson, as well as Exxon Mobil – which benefited from higher energy prices last year – protected it from the most severe price declines in 2022.

The market rout also presented plum buying opportunities for Persaud, who has an eye for quality names on sale.

She spotted good discounts in the consumer discretionary sector – particularly apparel and retailers that stumbled as their inventory piled up. Large cap, low beta health-care stocks also made for a solid opportunity. Cyclical tech also became interesting, but “none of the high-flying tech,” she said.

“When the market panics, you get this sweeping effect when everything gets sold off,” Persaud said. “There’s a lot of cyclical tech, things like semiconductors, that sold off really hard because of the fear around long duration. Those are extremely high-quality businesses.”

Persaud’s focus on value and quality are more than just a management style. It’s a tendency that ties back to her childhood in New York City as the daughter of parents who emigrated from Guyana.

“When I thought about why I like low-expectation investing, it goes back to the frugality of the immigrant background: You have to make a lot of a little,” she said. “Value investing is like having a low budget and seeing how much you can buy – that’s how I grew up.”

At one point, Persaud, a self-described “math and science kid,” was on track to follow in her father’s footsteps and become an engineer. In particular, she wanted to work toward a PhD in environmental engineering. A part-time job at Morgan Stanley to help pay for books while she was attending the Polytechnic Institute of New York University — now NYU’s Tandon School of Engineering — introduced her to the world of capital markets.

At Morgan Stanley, she built systems to digitize the firm’s trade clearing operations and became hooked. “It was the pace of the capital markets business, even though it was a back office – the pace completely matched,” she said.

It was enough to sway Persaud into a life-changing decision: She had won a fellowship from the National Science Foundation to get her PhD, and she ultimately passed on it to pursue a career in finance.

“My dad wasn’t happy,” she said. “The National Science Foundation fellowship as a brown immigrant woman is a really big deal. We had only been in the country for less than 10 years, so he was like, ‘What are you doing?’ That was very heartbreaking for him.”

Persaud found a way to combine her love of research and the excitement of capital markets, this time deciding she’d make a move from the back office to become a research analyst. She earned her master of business administration at the University of Pennsylvania’s Wharton School, interned at T. Rowe Price and made her way to Fidelity – where she has been since 2003.

At Fidelity, Persaud manages an array of strategies aside from FEQIX, including the Fidelity Global Equity Income Fund (FGILX) and Fidelity Advisor Global Equity Income Fund (FBLYX). She also co-manages the sub-portfolio of the Fidelity Advisor Multi-Asset Income Fund (FWATX) and the equity sleeve of the Fidelity and Fidelity Advisor Strategic Dividend Income funds (FSDIX and FASDX).

Income is a common theme for the offerings – and that’s not an accident. The search for steady income is also a keystone of her style and her upbringing.

“I like to balance price return with income in order to dampen overall volatility because what I’m really looking for is risk-adjusted return,” she said. “In a way, that’s an extremely natural concept to me, because I do think it comes from the immigrant history of trying to do a lot with a little.”