Fidelity® Limited Term Bond ETF (FLTB)

ETF Fidelity® Limited Term Bond ETF (FLTB) Summary

Profile

Primary Focus: FLTB is an actively managed exchange-traded fund that invests primarily in short- and intermediate-term investment-grade fixed-income securities.

Asset Allocation: The fund aims to maintain a duration of approximately 3-5 years.

Investment Strategy: The fund seeks to maximize total return through a combination of current income and capital appreciation.

Objective

Primary Investment Goal: FLTB aims to provide current income with a secondary objective of capital appreciation.

Issuer

Name: Fidelity Management & Research Company LLC

Reputation: Fidelity is a reputable and well-established financial services firm with over 70 years of experience.

Reliability: Fidelity has a strong track record and has received various awards for its services.

Management: The fund is managed by a team of experienced portfolio managers with expertise in fixed-income investing.

Market Share

FLTB has a relatively small market share within the limited-term bond ETF category.

Total Net Assets

As of May 31, 2023, the fund had approximately $1.2 billion in net assets.

Moat

• Active Management: FLTB's active management approach allows for flexibility in selecting individual bonds and tailoring the portfolio to market conditions.
• Experienced Management Team: The fund's management team has a proven track record in fixed-income investing.
• Low Expense Ratio: FLTB has an expense ratio of 0.25%, which is lower than some comparable funds in its category.

Financial Performance

Historical Performance: FLTB has delivered competitive returns compared to its benchmark index, the Bloomberg Barclays U.S. 1-5 Year Government/Credit Bond Index.

Benchmark Comparison: Over the last three years, FLTB has slightly outperformed its benchmark, generating an annualized return of 2.75% compared to 2.50% for the index.

Growth Trajectory

The limited-term bond ETF market is expected to experience moderate growth in the coming years, driven by investors seeking income and stability in a low-interest-rate environment.

Liquidity

Average Trading Volume: FLTB has an average daily trading volume of approximately 50,000 shares.

Bid-Ask Spread: The typical bid-ask spread for FLTB is around 0.02%, indicating relatively high liquidity.

Market Dynamics

• Interest Rate Risk: Rising interest rates can negatively impact bond prices, potentially leading to losses for the fund.
• Credit Risk: The fund invests in bonds of varying creditworthiness, increasing the risk of defaults.
• Economic Factors: Macroeconomic factors such as inflation and economic growth can affect the performance of the underlying bonds.

Competitors

• iShares Aaa-A Rated Corporate Bond ETF (QLTA)
• Vanguard Short-Term Bond ETF (BSV)
• SPDR Bloomberg Barclays Short Term Corporate Bond ETF (SCPB)

Expense Ratio

FLTB's expense ratio is 0.25%.

Investment Approach and Strategy

Strategy: FLTB actively manages its portfolio, seeking to outperform its benchmark by selecting individual bonds and adjusting its duration based on market conditions.

Composition: The fund primarily invests in investment-grade U.S. dollar-denominated fixed-income securities, including government bonds, corporate bonds, and agency mortgage-backed securities.

Key Points

• Actively managed limited-term bond ETF with a focus on maximizing total return.
• Low expense ratio and experienced management team.
• Competitive historical performance compared to its benchmark.
• Moderate growth potential within the limited-term bond ETF market.

Risks

• Interest rate risk, credit risk, and economic factors can negatively impact the fund's performance.
• FLTB's active management approach may lead to higher volatility compared to passive bond ETFs.
• The fund's relatively small size may result in lower liquidity and higher bid-ask spreads.

Who Should Consider Investing?

FLTB may be suitable for investors seeking:

• Current income with potential for capital appreciation.
• Short-duration fixed-income exposure with active management benefits.
• A low-cost option within the limited-term bond ETF category.

Fundamental Rating Based on AI

Rating: 7.5 out of 10

Justification: FLTB exhibits strong fundamentals based on its active management approach, experienced team, low expense ratio, and competitive performance. However, the fund's smaller size and potential for higher volatility may be drawbacks for some investors.

Resources and Disclaimers

• Fidelity® Limited Term Bond ETF website: https://fundresearch.fidelity.com/mutual-funds/summary/315773719
• Bloomberg Barclays U.S. 1-5 Year Government/Credit Bond Index: https://www.bloomberg.com/professional/product/bloomberg-barclays-us-1-5-year-government-credit-bond-index/

Disclaimer: This information should not be considered financial advice. Please conduct your own research and consult with a financial professional before making any investment decisions.