Fidelity Total Bond ETF

FBND

Market cap $25.9B

These options are solid starting points. Morningstar's Guide to Portfolio Diversification.

It's no secret that the fixed income landscape has come back to life after years of relative quiet. Where investors once had to really look for sources of income or yield, the live rate market has brought plenty of opportunities to fixed income.

In a recent Market Outlook Symposium we hosted at VettaFi, we learned that 2026 has marked the return of fixed income as a strong contributor to an investor's total return. We also learned that the biggest theme in fixed income investing this year is dispersion.

The active bond ETF wrapper is about to absorb a structural shift. the PIMCO Active Bond ETF (NYSEARCA:BOND | BOND Price Prediction) sits near $92 after a 6% total return over the past year, while Fidelity's Fidelity Total Bond ETF (NYSEARCA:FBND) and BlackRock's iShares High Yield Muni Active ETF (BATS:HIMU) round out a trio positioned to catch fund flows from the roughly 100 mutual fund-to-ETF conversions State Street expects in 2026.

The Q2 Market Outlook Symposium, Defining the Quarter Ahead, held on April 30, 2026, brought together industry leaders to dissect the evolving macroeconomic landscape and highlight sophisticated strategies for the modern portfolio.

Inflation has not cooled. CPI reached 330.293 in March 2026, climbing from 320.302 a year earlier, and Core PCE, the Fed's preferred gauge, sits in the 90.9th percentile of its 12-month range.

Fidelity Total Bond ETF offers a more conservative, actively managed fixed-income exposure with a low 0.36% expense ratio and $25B in assets. FBND's high-quality portfolio, dominated by U.S. Treasuries and Government debt, results in a modest yield (4.68%) and reduced capital loss risk. Despite higher duration (6.02 years) and interest rate sensitivity, FBND has outperformed both the Bloomberg Aggregate Index and BND since inception.

Fidelity Total Bond ETF (NYSEARCA:FBND) pays income every single month, holds roughly $25 billion in assets, and carries an expense ratio of just 0.36%.

For the full year, the Fidelity Total Bond ETF - NAV Return was 7.58%, compared to 7.30% for the Bloomberg U.S. Aggregate Bond Index. The U.S. Federal Reserve followed through with additional policy rate reductions in October and December, bringing the federal funds rate down to a target range of 3.5% to 3.75%. Versus the Aggregate index, the ETF was overweight risk assets at year-end, with a tilt toward short- and intermediate-term investment-grade corporate credit and high-yield securities.

Throughout 2025, some of the most popular income products in the market weren't traditional dividend funds.