FLDR Profile
The Fidelity Low Duration Bond Factor ETF primarily invests a minimum of 80% of its assets in securities that are part of its designated index. This index is meticulously engineered to balance interest rate risk and credit risk, aiming to enhance both returns and risk metrics compared to traditional U.S. investment-grade floating rate note indices. It is exclusively composed of U.S. investment-grade floating rate notes and U.S. Treasury notes, providing a focused investment approach within the fixed-income sector.
The ETF targets floating rate notes, which are debt securities with interest rates that adjust periodically based on market conditions. This feature helps mitigate the impact of rising interest rates, offering a potential shield against interest rate volatility while maintaining a low duration profile. The inclusion of U.S. Treasury notes adds an element of stability and credit quality, contributing to the fund's objective of delivering consistent income with lower sensitivity to interest rate changes.
By investing in this specialized index, the ETF seeks to provide investors with an optimized exposure to investment-grade fixed-income securities. The strategy aims to improve risk-adjusted returns by focusing on securities that offer floating interest rates, thus benefiting from a rising rate environment while minimizing duration risk. This approach is particularly attractive to investors looking for income stability and reduced interest rate exposure in their bond portfolios.
Managed by Fidelity Investments, the ETF benefits from the firm's extensive expertise in fixed income and portfolio management. Fidelity’s rigorous analysis and strategic approach ensure that the fund aligns with its investment objectives, providing a tailored solution for investors seeking to balance risk and return in a low-duration fixed-income strategy. The firm’s commitment to innovative investment solutions supports the ETF's goal of delivering attractive risk-adjusted performance within the bond market.
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