Skip to Content
Fund Spy: Morningstar Medalist Edition

A Look Inside Fidelity's Core Bond Lineup

With three Morningstar Medalists in the intermediate-term bond category, the firm has built an impressive core bond effort with a straightforward, risk-conscious approach.

Mentioned: , , ,

Unlike some of its wider-ranging competitors, Fidelity plays it relatively straight when it comes to its lineup of intermediate-term bond taxable options. The firm's managers don't make meaningful interest-rate bets and tend to maintain sizable allocations to Treasuries for diversification, even in Fidelity's more adventurous strategies. And while the portfolio managers do make some use of derivatives, these are largely cash bond strategies.

While the funds are more benchmark-aware than some--Fidelity is notably one of the only firms not to launch an unconstrained option in recent years--they are not closet indexers. Instead of making big macro bets, the focus is on identifying mispricings at the sector and security levels, often with a contrarian edge. So, for example, the firm's funds have increasingly favored corporates--and even junk bonds--during the past year as that sector has come under pressure, while significantly underweighting mortgages, which the team views as overvalued. Fidelity has built an impressive team of analysts and has invested in a suite of tools that supports security analysis in corporates, mortgages, and structured fare. Its mortgage team has done a particularly good job at dedicated charges such as  Fidelity GNMA (FGMNX), and its efforts play a big role in the success of the core funds.

Sarah Bush has a position in the following securities mentioned above: FBNDX. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.