FBND | Fidelity Total Bond ETF

FBND ISSUER

The FBND issuer, part of the Fidelity Group of Funds, adheres to a strategy characterized by a robust commitment to debt securities, ensuring at least 80% of assets are invested in various types of debt instruments and repurchase agreements. Drawing guidance from the Bloomberg U.S. Universal Bond Index, the issuer strategically allocates assets across investment-grade, high yield, and emerging markets asset classes. This includes investments in countries with emerging stock markets as defined by MSCI or those with low- to middle-income economies classified by the World Bank. With a flexible approach, up to 20% of assets are directed towards lower-quality debt securities, also known as high yield or junk bonds. The issuer actively manages interest rate risk to mirror the index while diversifying investments across domestic and foreign issuers, market sectors, and maturities. Fundamental analysis drives investment decisions, encompassing factors such as issuer credit quality, potential for success, currency and economic risks, and security-specific features. Moreover, the issuer engages in leveraged transactions, utilizing derivatives such as swaps, options, and futures contracts to adjust risk exposure and capitalize on trading opportunities within the market.

FBND DIVIDEND

The FBND dividend policy is structured to provide investors with regular income distributions while maintaining a focus on the fund's overarching investment objectives. As part of the Fidelity Group of Funds, FBND employs a disciplined approach to managing its dividend payouts. With a portfolio primarily composed of debt securities and repurchase agreements, the fund aims to generate consistent income for its shareholders. The dividend payments are influenced by various factors, including the performance of the underlying assets, prevailing interest rates, and the issuer's analysis of credit quality and market conditions. By adhering to a prudent investment strategy and allocating assets across different asset classes and market sectors, FBND strives to sustain its dividend payments over time, delivering value to investors seeking income from their investments.

FBND TRACKING

The FBND tracking mechanism is integral to its investment strategy, designed to closely follow the performance of the Bloomberg U.S. Universal Bond Index while adhering to specific investment guidelines. As part of the Fidelity Group of Funds, FBND employs a meticulous approach to tracking the index, ensuring that at least 80% of its assets are invested in debt securities and repurchase agreements. By utilizing the Bloomberg U.S. Universal Bond Index as a guide, FBND allocates assets across investment-grade, high yield, and emerging markets asset classes, aiming to replicate the index's overall interest rate risk. Additionally, the fund's tracking mechanism involves active management of its portfolio, including analyzing the credit quality of issuers, assessing currency and economic risks, and evaluating security-specific features to select investments that closely mirror the index's composition and performance. Through diligent monitoring and strategic adjustments, FBND endeavors to achieve its tracking objective while delivering competitive returns to investors.

FBND CORRELATION

The correlation strategy employed by FBND, a member of the Fidelity Group of Funds, is crucial in maintaining alignment with its benchmark index, the Bloomberg U.S. Universal Bond Index, while managing risk. FBND meticulously analyzes the correlation between its portfolio and the index, ensuring that its investment decisions reflect movements in the broader bond market. By investing primarily in debt securities and repurchase agreements, FBND aims to maintain a high correlation with the index's performance, thus providing investors with a reliable representation of the bond market's movements. Additionally, the fund's allocation across different asset classes, market sectors, and maturities is strategically adjusted to optimize correlation while diversifying risk. Through active monitoring and periodic rebalancing, FBND endeavors to sustain a strong correlation with its benchmark, offering investors the opportunity to participate in the bond market's performance with a level of consistency and reliability.

FBND SECTOR

The FBND sector strategy is characterized by a comprehensive approach to asset allocation across various sectors within the bond market. As a member of the Fidelity Group of Funds, FBND focuses on diversifying its portfolio across different sectors to mitigate risk and capture opportunities for returns. The fund strategically allocates assets across sectors such as government bonds, corporate bonds, mortgage-backed securities, and other fixed-income instruments, aiming to achieve a balanced exposure that reflects prevailing market conditions. By analyzing sector-specific factors such as economic trends, issuer credit quality, and interest rate movements, FBND seeks to capitalize on sector-specific opportunities while managing sector-related risks. Through active management and periodic adjustments to sector allocations, FBND aims to optimize its sector strategy to deliver competitive returns to investors over the long term.

FBND EXPOSURE

The FBND exposure strategy is carefully crafted to provide investors with diversified exposure to various segments of the bond market while managing risk effectively. As a constituent of the Fidelity Group of Funds, FBND strategically allocates its assets across different asset classes, market sectors, and geographical regions to optimize risk-adjusted returns. With a primary focus on debt securities and repurchase agreements, the fund seeks to capture opportunities in investment-grade, high yield, and emerging markets asset classes, guided by the Bloomberg U.S. Universal Bond Index. FBND also maintains flexibility by investing up to 20% of its assets in lower-quality debt securities, commonly known as junk bonds, to enhance potential returns. By actively monitoring credit quality, economic indicators, and market trends, FBND aims to manage exposure effectively, ensuring a balanced portfolio that aligns with its investment objectives while providing investors with opportunities for long-term growth and income.