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Fidelity Trims Fees on 3 Bond ETFs

April 3, 2018 2:59 pm
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Fidelity lowered the expense ratios on its three actively managed fixed income exchange-traded funds. The new fees went into effect April 1, according to a filing with the Securities and Exchange Commission.

Fidelity's bond ETFs, all of which launched in 2014, are the the Fidelity Corporate Bond ETF (NYSE:FCOR), Fidelity Limited Term Bond ETF (NYSE:FLTB) and Fidelity Total Bond ETF (NYSE:FBND). The expense ratios on all three ETFs are now 0.36 percent per year, or $36 on a $10,000 investment, down from 0.45 percent.

FBND, which had $373.4 million in assets under management as of March 29, is the largest of Fidelity's actively managed bonds ETFs. That ETF looks to beat the Bloomberg Barclays US Aggregate Bond Index. FBND holds 725 bonds and has a 30-day SEC yield of 3.10 percent.

The Other ETFs

FLTB, the limited-term bond ETF, has $173.2 million in assets under management and seekts to outperform the Bloomberg Barclays U.S. Government/Credit 1-5 Year Bond Index. That ETF has 296 holdings. FLTB has an effective duration of 2.71 years and a 30-day SEC yield of 2.48 percent. Nearly 66 percent of the ETF's holdings are rated investment-grade while 25.69 percent are rated AAA, according to issuer data.

FCOR, the Fidelity Corporate Bond ETF, has almost $69 million in assets and looks to top the Bloomberg Barclays U.S. Credit Bond Index. That ETF has 270 holdings and an effective duration of 6.91 years. Its 30-day SEC yield is 3.48 percent.

Nearly 76 percent of FCOR's roster is rated investment-grade. With the fund being actively managed it can and does include some junk-rated debt. FCOR's junk exposure is 16.54 percent.

Fee Friendly

Fidelity is no stranger to low-fee ETFs. Each of the issuer's 11 sector ETFs, including popular funds such as the Fidelity MSCI Information Tech ETF (NYSE:FTEC) and the Fidelity MSCI Health Care ETF (NYSE:FHLC), charge just 0.084 percent per year. That makes Fidelity's sector ETFs the least expensive sector ETFs on the market.

Fidelity clients can trade all of the firm's ETFs, including the aforementioned bond funds, commission-free.

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