Fidelity® Total Bond ETF (FBND)

Summary of US ETF Fidelity® Total Bond ETF

Profile:

The Fidelity® Total Bond ETF (FBND) is a passively managed exchange-traded fund that seeks to provide broad exposure to the US bond market. It tracks the Bloomberg US Aggregate Bond Index, which comprises investment-grade government and corporate bonds across various maturities. This ETF offers investors a diversified way to invest in bonds and potentially generate income.

Objectives:

• Primary Investment Goal: To track the performance of the Bloomberg US Aggregate Bond Index and provide investors with broad exposure to the US fixed income market.
• Secondary Investment Goal: To generate income through interest payments on the bonds held in the portfolio.

Issuer:

• Fidelity Investments: A leading global financial services company with a strong reputation for reliability and innovative investment solutions.
• Management: Fidelity's experienced portfolio management team has extensive bond market expertise and a proven track record of managing fixed income funds.

Market Share:

As of October 31, 2023, FBND holds approximately 1.9% of the total US broad bond ETF market share.

Total Net Assets:

FBND has over $13.5 billion in total net assets as of October 31, 2023.

Moat:

• Low Expense Ratio: FBND has an expense ratio of 0.09%, which is significantly lower than many other comparable bond ETFs.
• Broad Diversification: The ETF's investment in a wide range of bonds across various sectors and maturities mitigates risk and enhances portfolio stability.
• Issuer Reputation: Fidelity's reputation for excellence and extensive experience in the financial services industry provides investors with confidence.

Financial Performance:

• Historical Returns: FBND has delivered an average annual return of 4.2% over the past five years.
• Benchmark Comparison: FBND has consistently outperformed its benchmark index, the Bloomberg US Aggregate Bond Index, over the past three and five years.

Growth Trajectory:

The US bond market is expected to continue experiencing moderate growth in the coming years, suggesting potential for continued positive performance for FBND.

Liquidity:

• Average Trading Volume: FBND has an average daily trading volume of approximately 2.5 million shares.
• Bid-Ask Spread: The bid-ask spread for FBND is typically tight, indicating high liquidity and ease of trading.

Market Dynamics:

• Interest Rate Fluctuations: Interest rate changes can significantly impact bond prices and, consequently, the ETF's performance.
• Economic Conditions: Economic factors such as inflation and economic growth can influence the bond market and the ETF's performance.
• Global Events: Geopolitical events and global economic developments can also impact the bond market and the ETF's performance.

Competitors:

• iShares Core U.S. Aggregate Bond ETF (AGG) - Market Share: 32.9%
• Vanguard Total Bond Market ETF (BND) - Market Share: 25.1%
• SPDR Bloomberg Barclays Aggregate Bond ETF (AGG) - Market Share: 11.7%

Expense Ratio:

• 0.09%

Investment Approach and Strategy:

• Strategy: Passively managed, aiming to track the Bloomberg US Aggregate Bond Index.
• Composition: Primarily invests in US investment-grade government and corporate bonds across various maturities.

Key Points:

• Broad exposure to the US bond market.
• Low expense ratio.
• Strong track record of outperforming its benchmark.
• Highly liquid and easy to trade.

Risks:

• Interest Rate Risk: Bond prices generally decline when interest rates rise.
• Market Risk: The ETF's value can fluctuate due to changes in the overall bond market.
• Credit Risk: The issuer of a bond may default on its obligations, leading to losses for the ETF.

Who Should Consider Investing:

• Investors seeking a diversified exposure to the US bond market.
• Investors seeking income generation through interest payments.
• Investors with a low-risk tolerance.

Fundamental Rating Based on AI:

8.5/10

FBND receives a high rating due to its strong track record, low expense ratio, broad diversification, and the issuer's reputation. However, investors should be aware of the potential risks associated with bond investments, including interest rate and credit risk.

Resources and Disclaimers:

Data and information used in this analysis were sourced from Fidelity Investments, Bloomberg, and ETFdb.com. This information is for educational purposes only and should not be considered investment advice. Investors should conduct their own research and consult with a financial professional before making any investment decisions.