Understanding Bond ETFs Fidelity Options

Fidelity offers a range of bond ETFs that can be a great addition to a diversified investment portfolio.

These bond ETFs track a variety of bond indexes, such as the Bloomberg Barclays US Aggregate Float Adjusted Index, which provides broad exposure to the US bond market.

Fidelity offers a commission-free trading option for these bond ETFs, making it easy to buy and sell without incurring additional costs.

By investing in a bond ETF, you can gain exposure to a diversified portfolio of bonds with a single trade.

Bond ETFs from Fidelity offer several benefits, including diversification and liquidity.

They can be a cost-effective way to gain exposure to a wide range of bonds, and often have lower fees compared to actively managed bond funds.

However, bond ETFs also have some risks to consider, such as maturity risk, interest rate risk, and credit risk.

These risks are similar to those associated with individual bonds and bond mutual funds.

Additionally, bond ETFs can have tracking risk, which is a measure of risk due to active management decisions made by the portfolio manager.

This means that even passively managed bond funds can exhibit tracking risk.

Funds vs. Bonds: What's the Difference?

Bond funds and individual bonds have a fixed income potential, with regular fund distributions or periodic payments of fixed amounts.

Bond funds and bond ETFs have the potential for capital appreciation and loss, but individual bonds are a safer bet if bought at par value and held to maturity without default.

Most bond funds do not have a maturity date, so principal will fluctuate, while individual bonds return principal or par value at maturity, subject to the creditworthiness of the issuer.

Bond funds and bond ETFs charge fees or expense ratios, which can be lower for ETFs, but individual bonds have brokerage fees and transaction costs in the secondary market.

Here's a comparison of the three options:

Bond ETFs are a good choice for fixed income investors who want intraday trading and holdings transparency, allowing them to tactically pick and choose when to enter and exit the market.

Bond ETFs have risks similar to individual bonds and bond mutual funds, such as maturity, interest rate, and credit risk.

Tracking risk is another concern, as it's a measure of risk due to active management decisions made by the portfolio manager. This means that even passively managed bond funds can exhibit tracking risk.

Some bond ETFs may not have a long enough track record to analyze how they might react to different market conditions and phases of the business cycle.

Fidelity Bond ETFs offer a range of options for investors seeking income and diversification. Fidelity Total Bond ETF (FLTB) is a core fixed income ETF designed for clients seeking income and protection from stock market volatility.

Fidelity Corporate Bond ETF is another option for investors seeking income and diversification from high-quality corporate bonds. This ETF is suitable for those who want to add corporate bonds to their portfolio.

Actively managed bond ETFs are growing in popularity, and Fidelity offers this type of ETF as well. These ETFs can be a low-cost way to buy a diversified basket of bonds.

Bond ETFs like Fidelity's are similar to bond mutual funds in that they hold a basket of individual bonds. However, bond ETFs can be traded intraday, and their holdings are disclosed daily.

Fidelity's bond ETFs are passively managed, meaning they attempt to mirror the performance of a bond index or benchmark. This approach can help minimize costs and maximize returns.

Here are the key differences between bond mutual funds and bond ETFs:

Overall, Fidelity Bond ETFs offer a convenient and cost-effective way to invest in bonds.

Market Factors play a significant role in determining the performance of Bond ETFs, including those offered by Fidelity. The overall state of the economy, particularly interest rates, has a direct impact on bond prices.

Low interest rates can lead to increased demand for bonds, causing their prices to rise. Conversely, high interest rates can make bonds less attractive, resulting in lower prices.

Inflation is another key market factor that affects bond ETFs, as it can erode the purchasing power of the bond's face value. High inflation can make bonds less valuable, while low inflation can make them more attractive.

Fidelity's Bond ETFs are designed to provide investors with a diversified portfolio of bonds, helping to mitigate the risks associated with individual bond holdings.

Actively managed bond ETFs can be a low-cost way to buy a diversified basket of bonds. They're growing in popularity, offering a convenient alternative to traditional bond investing.

Fidelity offers a range of bond ETFs, including a Total Bond ETF and a Corporate Bond ETF. You can also explore individual bonds or a combination of different types of products.

The bond universe is massive and complex, making a strong case for active bond management in today's market.

There are many options to consider when it comes to investing in bonds, including bond ETFs, bond mutual funds, and individual bonds.

You can choose from a variety of bond ETFs, such as the Fidelity Total Bond ETF, which offers a core fixed income investment for clients seeking income and protection from stock market volatility.

Bond ETFs are just one part of the bond universe, which is quite large and complex, making a strong case for active bond management.

Fidelity offers a range of bond ETFs, with 12 options available, including the Fidelity Corporate Bond ETF and the Fidelity Limited Term Bond ETF.

You can also consider the Fidelity High Yield Factor ETF and the Fidelity Low Duration Bond Factor ETF, which offer different investment strategies.

The Fidelity Investment Grade Bond ETF and the Fidelity Investment Grade Securitized ETF are other options to consider.

Additionally, Fidelity offers ETFs that focus on specific themes, such as the Fidelity Preferred Securities & Income ETF and the Fidelity Sustainable High Yield ETF.

You can explore the list of the largest bond ETFs by assets within 6 bond fund categories to get a better sense of the market.

The iShares Short-Term National Muni Bond ETF (SUB) is a popular choice among investors. It's listed among the largest bond ETFs by net assets in the US municipal bond ETF category.

This ETF is part of the iShares family, a well-established and reputable provider of exchange-traded funds. As of January 31, 2024, it's one of the largest bond ETFs in its category, according to Fidelity Investments.

Here are some key facts about the iShares Short-Term National Muni Bond ETF (SUB):

The iShares Short-Term National Muni Bond ETF (SUB) is a great option for investors seeking to add municipal bonds to their portfolios. By investing in this ETF, you can gain exposure to a diversified portfolio of short-term national municipal bonds.

Actively Managed ETFs are a great option for bond investors who want to buy a diversified basket of bonds at a lower cost.

Actively managed bond ETFs can be a low-cost way to invest in bonds, offering a more affordable alternative to traditional bond funds.

These ETFs allow investors to gain exposure to a wide range of bonds, including government, corporate, and international bonds, all in one investment.

They often have a team of experienced portfolio managers who actively select and monitor the bonds in the fund to ensure it remains diversified and aligned with the investor's goals.