BOSTON, February 22, 2023 – Fidelity Investments®, one of the world’s leading global fixed income investment managers, today announced the launch of Fidelity® Municipal Core Plus Bond Fund (FMBAX), adding to Fidelity’s diverse lineup of active fixed income strategies reaching across the risk spectrum. The fund, which allows Fidelity to participate in a fast-growing subset within the municipal bond space, is available commission-free and with no investment minimum to individual investors and financial advisors through Fidelity’s online brokerage platforms.
Measured against the Bloomberg Municipal Bond Index and the Fidelity Municipal Core Plus Bond Composite Index, Fidelity Municipal Core Plus Bond Fund seeks to provide a high current yield exempt from federal income tax. Growth of capital may also be considered. With ongoing retail and institutional demand for higher yielding municipal bond funds, this new product seeks to offer a strong yield and total return profile, but with the potential for lower volatility than pure high yield funds.
“Fidelity’s growing suite of active fixed income investment products leverage Fidelity’s breadth and depth of resources and expertise as an active manager to identify investment opportunities across the credit spectrum,” said Jamie Pagliocco, Fidelity’s Head of Fixed Income. “With the launch of the Fidelity Municipal Core Plus Bond Fund, we continue to meet the evolving needs of investors with this intermediate fixed income offering that includes both investment-grade and non-investment grade exposure to municipal securities.”
The fund will normally invest at least 80% of assets in municipal securities whose interest is exempt from federal income tax. While the majority of the municipal securities in which the fund invests are investment-grade (those of medium and high quality), the investment team will have the flexibility to add up to 30% in non-investment grade exposure when the market environment is favorable, add up to 20% in taxable debt, and use derivatives opportunistically.
Fidelity Municipal Core Plus Bond Fund is co-managed by experienced investment professionals Cormac Cullen, Michael Maka, and Elizah McLaughlin. As members of Fidelity's municipal bond team, they currently co-manage Fidelity’s national municipal bond funds, Fidelity’s state municipal bond funds, and various municipal bond portfolios for institutional clients. With decades of experience, the municipal bond team manages more than $43.7 billion in assets under management as of December 31, 2022.
Fixed Income at Fidelity
Fidelity is one of the most experienced fixed income managers in the industry, with more than $1,561 billion in assets under management as of December 31, 2022. Fidelity’s fixed income capabilities, which span the full breadth of fixed income strategies from money market funds to high yield portfolios to credit alternatives, are built upon its excellence in proprietary research, with an unrivaled 110+ research analysts and associates, 40+ portfolio managers, and 35+ traders.
Fidelity is committed to offering investors and financial advisors with a range of solutions in both mutual fund and ETF wrappers. Fidelity recently launched Fidelity Tactical Bond ETF (FTBD), which seeks a high level of current income. Growth of capital may also be considered. The launch of this ETF expanded Fidelity’s lineup to 12 active fixed income ETFs including Fidelity Total Bond ETF, Fidelity Limited Term Bond ETF, and Fidelity High Yield Factor ETF among others, with roughly $4.02 billion in assets under management across the fixed income ETF suite as of January 31, 2023.
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $10.3 trillion, including discretionary assets of $3.9 trillion as of December 31, 2022, we focus on meeting the unique needs of a diverse set of customers. Privately held for over 75 years, Fidelity employs nearly 67,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visithttps://www.fidelity.com/about-fidelity/our-company.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Information provided in, and presentation of, this document are for informational and educational purposes only and are not a recommendation to take any particular action, or any action at all, nor an offer or solicitation to buy or sell any securities or services presented. It is not investment advice. Fidelity does not provide legal or tax advice.
Before making any investment decisions, you should consult with your own professional advisers and take into account all of the particular facts and circumstances of your individual situation. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in these materials because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.
In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities). Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Lower-quality fixed income securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Foreign investments involve greater risks than U.S. investments, and can decline significantly in response to adverse issuer, political, regulatory, market, and economic risks. Any fixed-income security sold or redeemed prior to maturity may be subject to loss.
Fixed income investments entail interest rate risk (as interest rates rise bond prices usually fall), the risk of issuer default, issuer credit risk and inflation risk. The municipal market can be affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities. Income exempt from federal income tax may be subject to state or local tax. All or a portion of the fund's income may be subject to the federal alternative minimum tax. Income or fund distributions attributable to capital gains are usually subject to both state and federal income taxes. Fund and index performance may vary somewhat due to factors such as transaction costs, sample selection, and timing differences associated with index additions and deletions.
ETFs are subject to market fluctuation, the risks of their underlying investments, management fees, and other expenses. ETFs are bought and sold at prices set by the market – which can result in a premium or discount to NAV – the returns calculated using market price (market return) can differ from those calculated using NAV (NAV return).
Bloomberg U.S. Aggregate Bond Index is a broad based, flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed rate pass-throughs), asset-backed securities and collateralized mortgage-backed securities (agency and non-agency). It is not possible to invest directly in an index.
Fidelity Municipal Core Plus Bond Composite Index is a customized blend of unmanaged indices: Bloomberg 1-10 Year Municipal Bond Index – 60%, Bloomberg 10+ Year Municipal Bond Index – 30% and Bloomberg Municipal High Yield Index – 10%.
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