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Fidelity's FBND bond ETF offers yield but charges high fees and mixes risk, diluting bond protection.

Market News
03 Jun 2026
24/7 Wall Street
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Bearish
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Fidelity's Total Bond ETF (FBND) offers a diversified bond portfolio with a 4.7% yield and has outperformed passive benchmarks over 10 years. However, it charges a high 0.36% fee compared to 0.03% for passive funds like Vanguard's BND, which erodes long-term returns. FBND includes significant corporate credit risk, which can correlate with stock market downturns, reducing its effectiveness as a defensive bond allocation. Investors seeking true bond protection should consider pure Treasury ETFs for defense and separate credit risk exposure, rather than paying a premium for FBND's mixed strategy that may not deliver the intended portfolio cushioning.

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