The ETF wrapper has helped investors craft even more customized portfolios to meet their goals. With its transparency, flexibility, and tax efficiency, the wrapper has empowered asset managers to build increasingly discreetly packaged strategies that serve as building blocks. Taking that one step further, investors can combine ETFs to produce different investment outcomes. Crafting a specific level of risk, including funds like the short-term bond ETF FLTB, could open new possibilities for investors.
See more: Capture the Value Rotation With This ETF Duo
The Fidelity Limited Term Bond ETF (FLTB ) offers an active approach to investment-grade short-maturity bonds. The short-term bond ETF charges a 25-basis-point (bps) fee to offer a combination of solid yields and reduced duration risk. Specifically, FLTB aims to offer a maturity averaging between two and five years. Furthermore, its active managers can invest in riskier debt securities using their discretion.
Short Term Bond ETF FLTB: How Pairing ETFs Can Deliver for Investors
Specifically, the ETF’s managers use the Fidelity Limited Term Composite Index as a guide to investing across high yield and investment-grade segments. The strategy’s managers invest in both domestic and foreign-issued debt and also consider issuer credit quality, currency, potential success, and other factors.
That has helped the short-term bond ETF FLTB return 6.25% over the last year as of November 30, per Fidelity Investments data. It has also seen similar performance over three years, producing a 5.83% return in that time. It provided a 4.27% 30-day SEC unsubsidized yield as of December 31, as well.
Investors can pair FLTB with other ETFs to tailor the overall risk. Want to add higher yield via potentially riskier debt securities? The Fidelity Sustainable High Yield ETF (FSYD ) relies on a multi-factor quantitative screen and fundamental research to identify the best opportunities. Want more from the investment-grade space? The Fidelity Investment Grade Bond ETF (FIGB ) can help.
Pairing FLTB with either or with any combination of bond ETFs can help raise or lower overall risk via the ETF wrapper. As portfolios become increasingly customized and advanced, looking to ETFs like FLTB for stability, or others for a bit more risk, can help portfolios deliver on investor objectives.
For more news, information, and analysis, visit the ETF Investing Content Hub.
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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