FBND Profile
The Fidelity Total Bond ETF is a diversified fixed-income fund that seeks to provide broad exposure to the U.S. bond market by investing at least 80% of its assets in a wide range of debt securities. These include government bonds, corporate bonds, mortgage-backed securities, and other types of fixed-income instruments. The fund also engages in repurchase agreements for these securities to enhance liquidity and manage interest rate risk. Its investment approach is guided by the Bloomberg U.S. Universal Bond Index, which serves as a benchmark for asset allocation across various bond classes, including investment-grade, high-yield, and emerging market debt.
The fund's strategy includes a flexible allocation that allows up to 20% of its assets to be invested in lower-quality debt securities, commonly known as junk bonds. This exposure to high-yield bonds provides the potential for higher returns, albeit with increased risk, compared to investment-grade securities. By diversifying across different types of bonds, the fund aims to balance income generation with capital preservation, while also managing credit risk and interest rate sensitivity.
Fidelity Total Bond ETF is managed to maintain an interest rate risk profile similar to that of its benchmark index. The fund's portfolio managers actively adjust the duration and maturity of its holdings in response to market conditions and interest rate trends. This dynamic approach allows the fund to mitigate the impact of rising interest rates while seeking to capture opportunities for yield in a low-rate environment. The fund's management team leverages Fidelity's extensive research capabilities to identify attractive investment opportunities across the fixed-income spectrum.
As a core bond holding, the Fidelity Total Bond ETF is designed for investors seeking a comprehensive fixed-income solution that offers diversification across multiple bond sectors. The fund's exposure to a broad array of debt instruments makes it suitable for those looking to achieve income stability and risk-adjusted returns. Its inclusion of both high-yield and emerging market bonds provides an added layer of diversification and potential for higher income, making it an attractive option for long-term investors focused on income generation and capital preservation.
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