Fidelity® Limited Duration Bond StrategyA separately managed account that seeks to generate income from investment-grade bonds while limiting risk to principal over a full market cycle. The average portfolio duration has a target between 2–3 years |
Investment objective: Seeks to deliver income, while limiting risk to principal over a full market cycle
Types of investments: Primarily A- or higher investment-grade1 taxable bonds at time of purchase and a completion fund2
Investment minimum: $350,0003
Eligible Registration Types: Taxable & Retirement
Gross annual advisory fee: 0.35% – 0.40%4 (varies based on total assets invested)
Fidelity Limited Duration Bond Strategy provides you with an actively managed portfolio of investment grade bonds that seeks to provide income and are typically less volatile than stocks and high-yield bonds. As a result, we believe they should be part of a diversified portfolio.
Seeks income from high-quality bonds
The Fidelity Limited Duration Bond Strategy commonly maintains a portfolio of investment- grade bonds that has an average credit rating of at least A–, with 60% rated A– or better, with no bonds rated below BBB-, at the time of purchase. These high-quality bonds are typically issued by the U.S. Treasury, U.S. government agencies, and corporations that are established, have fairly healthy balance sheets, and possess a positive growth outlook.
The Strategy invests in a diverse mix of investment-grade bonds across a range of sectors and varying maturities. A decline in one sector could hopefully be offset by a gain in another, which may help smooth out portfolio volatility.
Strives to balance income vs risk
Fidelity Limited Duration Bond Strategy considers both income and price appreciation as potential sources of return and seeks bonds with a favorable risk/reward trade-off. Using a research-based approach, the investment management team strives to avoid bonds that will not compensate bond holders for their investment risk.
To also help manage risk, the strategy will seek to maintain an average duration5 similar to that of the Bloomberg US 1-5 Year Credit/Government Bond Blend Index.6 In general, portfolios with shorter durations are less sensitive to changes in interest rates than portfolios with longer durations.
Tapping Fidelity's Fixed Income expertise
Fidelity Management & Research Company LLC (FMR) brings investors a rich history of managing fixed income investments for over 50 years. Using proprietary research, models, and tools, FMR can analyze thousands of securities across the investment-grade bond universe. This capability allows them to build a diversified limited duration bond strategy to help generate income and manage risk—all while helping your account stay aligned with your preferences.
Fidelity's Fixed Income division believes investment success is a function of teamwork—involving portfolio managers, quantitative analysts, credit analysts and traders. Their investment team will actively manage your account, putting their knowledge, experience, and resources to work as they seek to uncover opportunities in all types of markets
Source: Fidelity Investments.
