If there’s any bond category that’s really intriguing right now, it might be corporate bonds. The 2026 bond landscape faces some intriguing shifts as interest rates face growing structural inflation.
Key Takeaways:
- Corporate bonds remain an important opportunity set in the 2026 bond landscape.
- Active ETFs like FCOR offer access to the segment with the active adaptability investors want.
- The fund could help portfolios get a bit more durability for an uncertain second half.
The Fidelity Corporate Bond ETF (FCOR ) has more than ten years of operation under its belt. Charging a competitive 36 basis point (bps) fee, the strategy actively targets investment-grade bonds.
Specifically, the fund includes corporate debt, such as repurchase agreements with corporate counterparties, as well as other securities, such as hybrids and synthetic securities, believed to have corporate debt-like characteristics. The fund can also use various derivative instruments.
Advantages of FCOR
Together, that has helped the fund return 6% over the last twelve months, according to YCharts data as of June 17th. Corporate issuer areas can offer appealing yields, with segments such as airlines offering a potentially attractive opportunity set.
The fund’s performance has helped it outperform the ETF Database Category Corporate Bonds average in that time. That average sat at 5.1% as of June 17th, trailing FCOR’s 6% return.
See more: How Active Investing Can Get More From Growth Stocks This Year
Should the Federal Reserve raise rates, too, an active ETF can help. The active corporate bond ETF can adapt to changing economic circumstances. What’s more, that active approach empowers the fund’s managers to assess each issuer on its merits rather than strictly follow a passive index.
Overall, the fund represents an intriguing way to update one’s corporate bond or overall debt allocation. With a fee competitive with many other bond ETFs, it may make for a strong satellite-type addition for the 2026 bond market.
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Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
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