Fidelity Limited Term Bond ETF (FLTB US) - Portfolio Construction Methodology

Core Insights - The Fidelity Limited Term Bond ETF (FLTB) focuses on shorter-duration, investment-grade U.S. corporate credit while allowing flexibility in allocation across high-quality taxable sectors [1] - The fund typically invests at least 80% of its assets in investment-grade debt and repurchase agreements, utilizing a composite policy benchmark for risk budgeting [1] - Portfolio construction aims for limited interest-rate sensitivity, diversified issuer exposure, and strict trading/liquidity controls [1] Investment Strategy - The investment strategy is driven by bottom-up fundamental research, quantitative relative-value models, and top-down macro views [1] - Sector rotation, issuer selection, and yield-curve posture are key components of the strategy [1] - Securitized assets and Treasuries are used to provide liquidity and stability, while non-core allocations are limited [1] Risk Management - Risk is managed through pre-trade analytics, scenario/curve stress tests, and cross-sector relative-value dashboards [1] - Independent oversight is part of the risk management framework [1] - The sell/trim discipline is based on spread normalization, thesis breaks, deteriorating fundamentals, or better risk-adjusted alternatives [1]