Fidelity Total Bond ETF

FBND

Market cap $22.8B

Stocks might still be the preferred investment of choice. But exchange traded funds (ETFs) are quickly gaining ground.

A reader asked for my thoughts on FBND, a diversified bond ETF focusing on high-quality, medium-term bonds. It is quite close to its benchmark, BND or AGG, with several important benefits and advantages. These include a higher 4.5% yield and consistent outperformance, even after accounting for slightly higher credit risk.

Consider these ETFs for a change of pace.

Last week, the iShares Flexible Income Active ETF (BINC) reached a significant milestone and became the latest member of the $10 billion of the active fixed income club. The exclusive club now has six members, fewer than half the number of active equity ETF members.

iShares Flexible Income Active ETF and Fidelity Total Bond ETF are two popular actively managed bond ETFs. Both funds seek to deliver superior risk-adjusted returns against the broader bond market, but they take two distinct strategies. BINC takes a more aggressive and unconstrained approach to asset allocation.

On this week's episode of ETF Prime, VettaFi's Head of Research Todd Rosenbluth discusses the rise of active ETFs and anticipated ETF share class structure. Later, Fidelity's Eric Granat and Christine Thorpe spotlight the Fidelity Hedged Equity ETF (FHEQ) and the Fidelity Total Bond ETF (FBND).

Fidelity Investment's investment-grade securitized ETF is seeing noteworthy investor attention in the current environment. The strong interest places the Fidelity Investment Grade Securitized ETF (FSEC) among the top 10 most popular active ETFs in 2025 to date, as measured by net flows, according to Kirsten Chang, senior industry analyst at VettaFi.

Talk about a wild ride for interest rates. Market odds have gone from pricing in three or four rate cuts this year to pricing in just one or two following the U.S./China trade truce last weekend.

After a strong 2024, Fidelity ETFs gathered approximately $10 billion in the first four months of 2025. Demand for actively managed products has been a key driver as Fidelity leans further into the ETF market.

FBND has historically outperformed the total bond market due to its dynamic allocation strategy. FBND's flexible approach helps navigate market conditions better than passive funds. However, interested investors should know that economic outlook volatility and narrow credit spreads that have begun widening make high-yield and investment-grade bonds less attractive, implying a headwind for FBND.