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Fidelity Adds Tactical Bond Mutual Fund

By Jeff Berman

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What You Need to Know

  • The new Fidelity Tactical Bond Fund allows investors to allocate assets across the full spectrum of the debt market.
  • That includes investment-grade, high-yield and emerging market debt securities.
  • The fund has a net expense ratio of 0.75% and gross expense ratio of 1.35%.

Fidelity Investments expanded its lineup of fixed income strategies further across the risk spectrum on Tuesday with the launch of the Fidelity Tactical Bond Fund (FBAGX on the Nasdaq).

The new mutual fund offers investors the ability to allocate their assets across the full spectrum of the debt market, including investment-grade (medium and high quality), high-yield and emerging market debt securities, Fidelity said.

The fund has a net expense ratio of 0.75% and gross expense ratio of 1.35%, and is available to individual investors and financial advisors via Fidelity’s online brokerage platforms.

Including the new fund, Fidelity now offers 54 fixed income mutual funds plus eight fixed income exchange-traded funds, a company spokesperson said Tuesday.

Before the launch of the Tactical Bond Fund, the most recent offerings were the Fidelity Environmental Bond Fund (FFEBX, launched June 15), the Fidelity Investment Grade Bond ETF (FIGB, March 2) and the Fidelity Investment Grade Securitized ETF (FSEC, March 20), she said.

Measuring the new fund against the Bloomberg U.S. Aggregate Bond Index, Fidelity said its Tactical Bond Fund “seeks a high level of current income and growth of capital by normally investing at least 80% of its assets in debt securities of all types and repurchase agreements for those securities.”

The new fund is being co-managed by Jeffrey Moore and Michael Plage, who together have managed the Fidelity Investment Grade Bond Fund since 2004 and 2016, respectively, the company said.

The investment team will use various investment techniques to manage the fund’s overall risk and interest rate risk, including sector rotation, asset allocation and security selection, according to Fidelity.

“Our suite of fixed income investment products leverages Fidelity’s investment capabilities and expertise as an active manager and offers investors a range of options to meet their evolving needs,” Jamie Pagliocco, Fidelity’s head of fixed income, said in a statement.

“The introduction of Fidelity Tactical Bond Fund allows us to offer retail investors and financial advisors an even more robust array of products across the risk spectrum, and we believe it will appeal to those seeking a high level of current income and growth,” according to Pagliocco.

Fidelity had assets under administration of $11.8 trillion, including discretionary assets of $4.5 trillion, as of Dec. 31, it said.

(Photo: Shutterstock)

Jeff Berman

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