American asset management firm Fidelity Investments has expanded its line-up of short duration bond mutual funds for investors and financial advisors with the launch of three new products.
According to Fidelity, the three new products Limited Term Bond Fund, Conservative Income Municipal Bond Fund and Short Duration High Income Fund are designed to lower the risk from rising interest rates.
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Managed by Fidelity veteran Doug McGinley, Conservative Income Municipal Bond Fund will invest in money market securities and investment-grade municipal debt securities with a short duration.
Limited Term Bond Fund will be managed by Fidelity veteran Robert Galusza, and will provide a high rate of income and is credit-oriented, investing in sectors such as corporates, commercial mortgage-backed securities, asset backed securities and Government agency mortgages, which offer higher yields than Treasuries and Government securities.
Short Duration High Income Fund, managed by Fidelity veteran Matt Conti, will invest in floating rate loans and investment grade corporate bonds.
Charlie Morrison, president of Fidelity’s fixed income division, said: "A top concern for many bond investors today is their exposure to interest rate risk and the negative impact rising rates could have on their bond portfolios. For investors seeking to lower this risk, short duration funds can be an appropriate addition to a well-diversified bond portfolio."
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By GlobalDataFidelity said that the three new short duration bond funds will be managed with varying degrees of credit and interest rate exposure, from primarily investment grade to below investment grade and with weighted average maturities between six months to five years.
With the launch of these three new funds, Fidelity will now be able to now offer investors and advisors with access to a suite of 13 short duration funds, with total assets under management of more than $34 billion.
