FPFD Profile
The Fidelity Preferred Securities & Income ETF is an actively managed fund designed to deliver income and potential capital appreciation by focusing on preferred securities and other income-producing assets. Under normal market conditions, the fund commits at least 80% of its total assets to investments in preferred securities, which include contingent convertible securities and corporate hybrid securities. This broad scope within the preferred securities category allows the fund to capture a range of income-generating opportunities from various types of preferred and hybrid instruments.
The fund's investment strategy targets preferred securities with credit ratings of at least BB by Standard & Poor’s, Ba by Moody’s, or equivalent ratings from other nationally recognized credit rating agencies. For securities that are unrated, the fund’s manager assesses them based on their perceived quality to ensure they meet the fund's standards for investment. This approach aims to maintain a focus on higher-quality securities while providing opportunities for income through a diverse set of instruments.
In addition to its primary investments in preferred securities, the fund may also hold other income-producing securities that align with its investment objectives. These can include a variety of financial instruments designed to generate income, such as certain types of bonds and convertible securities. The emphasis on income-producing assets reflects the fund’s goal of providing investors with a steady stream of income, supplemented by potential capital gains from its holdings.
As a non-diversified fund, the Fidelity Preferred Securities & Income ETF does not spread its investments across a broad array of asset classes but concentrates its investments within its specific focus on preferred and income-producing securities. This concentrated approach allows the fund to leverage opportunities within this niche market but also involves higher risk due to the lack of diversification. Investors should consider this strategy in the context of their overall investment goals and risk tolerance.
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