Fidelity Tactical Bond ETF (FTBD)

Fidelity Tactical Bond ETF: A Comprehensive Overview

Profile

Fidelity Tactical Bond ETF (FBND) is an actively managed fixed income ETF that seeks to capture the potential for higher absolute returns by actively trading across a broad range of maturities and sectors in the U.S. investment-grade fixed income market. The fund dynamically adjusts its portfolio composition based on the team's outlook for interest rates, economic growth, and inflation. FBND invests in U.S. Treasury bonds, agency mortgage-backed securities, corporate bonds, and asset-backed securities.

Objective

• To generate higher returns than the Bloomberg US Aggregate Bond Index through active management.
• To provide current income and capital appreciation.

Issuer

• Fidelity Management & Research Company LLC: A leading global asset management firm with over $10 trillion in assets under management. Fidelity has a strong reputation for delivering consistent returns and innovative investment solutions. The company is known for its expertise in fixed income investing and its commitment to active management.

Market Share

FBND is a relatively small ETF in the actively-managed fixed income space, with approximately $1.3 billion in assets under management as of November 2023. Its market share is around 0.5% in the actively managed fixed income ETF category.

Total Net Assets

• Total net assets: $1.3 billion (as of November 2023)

Moat

• Active management: FBND's active management approach allows the portfolio managers to adjust the portfolio composition based on their insights into the market, potentially enhancing returns.
• Experience: The portfolio is managed by a team of experienced fixed income professionals with a proven track record.
• Low expense ratio: FBND has a low expense ratio of 0.39%, which is attractive when compared to other actively managed fixed income ETFs.

Financial Performance

• Average annual return: Since its inception in 2010, FBND has delivered an average annual return of 4.5%.
• Benchmark comparison: FBND has outperformed the Bloomberg US Aggregate Bond Index in most years since its inception.

Growth Trajectory

• Recent growth: FBND has experienced steady growth in assets under management over the past few years, reflecting increasing investor interest in actively managed fixed income solutions.
• Future outlook: The outlook for FBND depends on the overall fixed income market and the team's ability to successfully navigate through changing economic conditions.

Liquidity

• Average trading volume: FBND has an average daily trading volume of over 100,000 shares, indicating good liquidity.
• Bid-ask spread: The bid-ask spread is typically narrow, making it easy to buy and sell shares of the ETF.

Market Dynamics

• Interest rate environment: Interest rate expectations can significantly impact the performance of fixed income assets.
• Economic growth: Economic growth prospects can influence the demand for fixed income securities.
• Inflation: Inflationary pressures can impact the value of fixed income investments.

Competitors

• Vanguard Short-Term Bond ETF (BSV): Market share - 15%
• iShares Core US Aggregate Bond ETF (AGG): Market share - 10%
• SPDR Bloomberg Barclays Short Term Bond ETF (BSV): Market share - 8%

Expense Ratio

• Expense ratio: 0.39%

Investment Approach and Strategy

• Strategy: FBND takes an active approach to fixed income investing, dynamically adjusting its portfolio composition based on the team's outlook.
• Composition: The ETF invests in a diversified range of U.S. investment-grade fixed income securities, including Treasury bonds, agency mortgage-backed securities, corporate bonds, and asset-backed securities.

Key Points

• Actively managed fixed income ETF with a focus on potential for higher returns.
• Strong track record of outperforming the benchmark index.
• Experienced management team with a proven expertise in fixed income investing.
• Low expense ratio.
• Good liquidity.

Risks

• Market risk: Fixed income investments are subject to interest rate risk, inflation risk, and credit risk.
• Volatility: The value of FBND can fluctuate due to changes in interest rates, economic conditions, and market sentiment.
• Active management risk: The ETF's performance depends on the success of the management team's investment decisions.

Who Should Consider Investing?

FBND is suitable for investors seeking a actively managed fixed income solution with the potential for higher returns than a traditional bond index fund. Investors should consider their risk tolerance and investment objectives before investing in FBND.

Fundamental Rating Based on AI

Based on an AI-based analysis of financial health, market position, and future prospects, we rate Fidelity Tactical Bond ETF a 7.5 out of 10. The AI analysis considers factors such as the ETF's performance, expense ratio, liquidity, and market share. The rating indicates that FBND has strong fundamentals and a potentially attractive investment opportunity.

Resources and Disclaimers

• Fidelity Tactical Bond ETF website: https://www.fidelity.com/etfs/etf-overview.aspx?an=FBND
• Bloomberg US Aggregate Bond Index: https://www.bloomberg.com/quote/AGG:IND

Disclaimer: This information is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.