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Fidelity Defined Maturity Funds

Fidelity's Defined Maturity Funds (DMFs) seek to provide federally tax-exempt income within a specified time period. Each fund offers professional management and diversification, like Fidelity's other municipal bond funds, with declining price volatility as the fund approaches its target maturity.

What we offer

  • Fidelity Municipal Income 2017 Fund (FMIFX)
  • Fidelity Municipal Income 2019 Fund (FMCFX)
  • Fidelity Municipal Income 2021 Fund (FOCFX)
  • Fidelity Municipal Income 2023 Fund (FCHPX)

How they work

Each fund invests primarily in investment-grade municipal bonds with similar maturity dates, which the fund generally holds to maturity. As a result, the interest rate sensitivity (and, thus, price volatility) of each fund is designed to fall gradually over time as maturity approaches.

For as long as you own them, the funds distribute federally tax-free monthly dividends that you can reinvest or withdraw. At maturity, the funds liquidate and distribute net assets to shareholders.

Potential uses:

  • Generate federally tax-exempt income: DMFs seek to provide federally tax-exempt income via monthly distributions, which investors have the option of withdrawing as income. While the distribution amounts will fluctuate, the funds can be appropriate options for investors looking to receive monthly income for their cash flow needs.
  • Reinvest to maximize payout potential: Investors can chose to reinvest distributions in order to maximize a fund’s payout potential at maturity. While the funds do not guarantee a predetermined amount, their declining price volatility as their defined end dates approach may help investors plan for their financial needs, if the funds are held to maturity.
  • Build laddering strategy for ongoing income: Investors and institutions use bond ladders to attempt to generate income streams for prolonged time horizons. But building bond ladders with individual securities can be costly and time consuming. With the DMF series, investors have the ability to create a laddering strategy by investing in multiple funds across a range of maturities.
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 and credit and default risks for both issuers and counterparties.

The municipal market is volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities.

Defined Maturity Funds are not designed for investors seeking a stable net value asset (NAV) or guaranteed income.

To protect existing shareholders and to ensure orderly liquidation of the funds, the funds will close to purchases for new and existing shareholders 12 months prior to their maturity date. As the funds approach their liquidation dates, the fund's securities will mature and the funds may reinvest the proceeds in money market securities with lower yields than the securities previously held by the funds.

Although money market funds seek to maintain a stable NAV of a $1.00 per share, this is not guaranteed and they may in fact lose money.

In addition, the amount of the fund's income distributions will vary over time and the breakdown of returns between fund distributions and liquidation proceeds will not be predictable at the time of your investment, resulting in a gain or loss for tax purposes. A portion of fund distributions may be subject to state or federal income taxes, AMT, or taxable as capital gains.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information.  Read it carefully.