1. Investment-grade bonds are bonds rated BBB- or higher by S&P or Fitch, and/or Baa3 or higher by Moody's, respectively. Ratings agencies judge these bonds to have a lower risk of default. Investors may restrict their account to bonds with A– or higher credit ratings at time of purchase.
2. Fidelity® Wealth Services (FWS) Wealth Management service-level clients and all Fidelity® Strategic Disciplines (FSD) clients must generally qualify for support from a dedicated Fidelity advisor, which is based on a variety of factors (for example, a client with at least $500,000 invested in an eligible Fidelity account(s) would typically qualify). Account investment minimum is $50,000 for FWS, $100,000 for FSD equity strategy, and $350,000 for an FSD bond strategy. Non-discretionary financial planning is available for Fidelity Strategic Disciplines.
3. The advisory fee does not cover charges resulting from trades effected with or through broker-dealers other than Fidelity Investments affiliates, mark-ups or mark-downs by broker-dealers, transfer taxes, exchange fees, regulatory fees, odd-lot differentials, handling charges, electronic fund and wire transfer fees, or any other charges imposed by law or otherwise applicable to your account. You will also incur underlying expenses associated with the investment vehicles selected.
4. Duration estimates how much a bond's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a bond or fund with a 5-year duration is likely to lose about 5% of its value. For a bond with known cash flows, duration is computed using all cash flows until the bond's maturity. Duration monitoring entails conducting oversight to seek to ensure that portfolio duration is within an acceptable range of the index duration.
5. The Bloomberg U.S. Intermediate Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). Must have a maturity from 1 up to (but not including) 10 years for all sectors except for Securitized (MBS, ABS, CMBS), which does not have a maximum weighted average maturity (MBS) or remaining average life (ABS, CMBS) constraint.
All indexes are unmanaged, and performance of the indexes includes reinvestment of dividends and interest income, unless otherwise noted. Indexes are not illustrative of any particular investment, and it is not possible to invest directly in an index. Securities indices are not subject to fees and expenses typically associated with managed accounts or investment funds.
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 counter parties. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Fidelity® Strategic Disciplines provides non discretionary financial planning and discretionary investment management for a fee. Fidelity® Strategic Disciplines includes the Fidelity® Equity-Income Strategy, the Fidelity® U.S. large Cap Equity Strategy, the Fidelity® Tax-Managed U.S. Equity Index Strategy, the Fidelity® lnternational Equity Strategy, the Fidelity® Tax-Managed International Equity Index Strategy, the Fidelity® Core Bond Strategy. the Fidelity® Intermediate Municipal Strategy, and the Breckinridge Intermediate Municipal Strategy. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, FBS, and NFS are Fidelity Investments companies.
FPWA has engaged Fidelity Management & Research Company LLC , a registered investment adviser and a Fidelity Investments company, to provide the day-to-day discretionary portfolio management of Fidelity® Intermediate Municipal Strategy and Fidelity® Core Bond Strategy accounts, including investment selection and trade execution, subject to FPWA's oversight.
FPWA has engaged Strategic Advisers LLC, a registered investment adviser and a Fidelity Investments company, to provide the day-to-day discretionary portfolio management of Fidelity® Equity Income Strategy, Fidelity® U.S. Large Cap Equity Strategy, Fidelity® International Equity Strategy, Fidelity® Tax-Managed International Equity Index Strategy and Fidelity® Tax-Managed U.S. Equity Index Strategy accounts, including investment selection and trade execution, subject to FPWA's oversight. Strategic Advisers LLC implements trades for Fidelity® Equity Income Strategy Fidelity® International Equity Strategy and Fidelity® U.S. Large Cap Equity Strategy accounts based on the model portfolio of investments it receives from its affiliate, Fidelity Management & Research Company LLC, but may select investments for an account that differ from Fidelity Management & Research Company LLC's model.
FPWA has engaged Breckinridge Capital Advisors, Inc. to provide the day-to-day discretionary portfolio management of Breckinridge Intermediate Municipal Strategy accounts, including investment selection and trade execution, subject to FPWA's oversight. Breckinridge is an independent registered investment adviser and is not affiliated with any Fidelity Investments company.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
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The Fidelity Core Bond Strategy commonly maintains a portfolio of investment-grade bonds that has an average credit rating of at least A–, with 80% rated A– or better at the time of purchase. These high-quality bonds are typically issued by the U.S. Treasury, U.S. government agencies, and corporations that are established, have fairly healthy balance sheets, and possess a positive growth outlook.
