Opportunities with short duration bonds

Fill the gap between cash or money markets and longer term bond funds to help generate income while managing interest rate risk.

What are short duration bonds?

Short duration bonds have debt investments with maturities from a few months to five years. The limited amount of time until maturity helps minimize the risk that rising interest rates will cause their value to decline. While they produce less income than longer duration fixed income investments over the long term, short duration bonds may experience smaller price swings.

Why choose short duration bonds?

  • Less sensitivity to interest rate changes than the overall U.S. credit bond market1
  • Frequent reinvestment as rates rise2
  • Offer higher yields in comparison to cash investments3

Short duration funds

Fidelity® Limited Term Bond Fund (FJRLX)
This fund might be appropriate for investors who prefer investment grade bonds, yet are looking to limit the risk of rising interest rates while seeking higher yield.

Fidelity® Short Duration High Income Fund (FSAHX)
This fund might be appropriate for investors looking for higher yield who are willing to take on more credit risk while limiting interest rate risk.

Fidelity® Conservative Income Municipal Bond Fund (FCRDX)
This fund, whose income is normally exempt from federal income taxes, might be appropriate for investors looking for more yield than money market funds are providing, and wanting to take a more conservative approach to both credit and interest rate risk than many other bond funds.

Thought leadership

Filling the gap with short duration bonds (4:23)
Fund managers discuss their thinking on short duration bonds and the advantages they provide investors.

Find your flavor of short duration
Shorter duration bonds may provide limited price volatility and varying levels of income.

Get more yield on your cash
Finding yield is a challenge, but possible. Here are ways to help get more from your cash.