FLTB Profile
The Fidelity Limited Term Bond ETF primarily invests at least 80% of its assets in high-quality, investment-grade debt securities. This includes a diverse array of fixed-income instruments such as corporate bonds, government securities, and mortgage-backed securities, along with repurchase agreements tied to these types of securities. The focus is on maintaining a portfolio of medium to high-quality bonds, aiming to provide stable income while managing credit risk.
The ETF's investment strategy is designed to mirror the interest rate risk profile of the Fidelity Limited Term Composite Index. By aligning the fund’s duration and maturity profile with this benchmark, the manager seeks to offer investors a risk profile that is consistent with that of the index. The index itself is a broad measure of investment-grade bonds with a limited maturity range, making it an appropriate benchmark for evaluating the fund's performance.
To manage interest rate risk effectively, the fund typically maintains a dollar-weighted average maturity of between two and five years. This relatively short to intermediate maturity range helps to mitigate the impact of interest rate fluctuations on the fund’s returns, providing a balance between yield and interest rate sensitivity. By focusing on this maturity range, the fund aims to offer a stable income stream with lower volatility compared to longer-duration bonds.
Investors in the Fidelity Limited Term Bond ETF benefit from exposure to a portfolio of high-quality debt securities with a controlled maturity profile. This approach is intended to provide a stable income while managing interest rate risk, making it a suitable option for those seeking conservative fixed-income investments. The fund’s strategy of maintaining alignment with the Fidelity Limited Term Composite Index ensures a consistent approach to managing interest rate and credit risks.
|
