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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Fidelity Investments® Launches First Actively Managed Defined Maturity Municipal Income Funds |
Fidelity - June 22, 2011
Four Fixed-Income Funds Seek to Fill a Gap in Municipal Bond Investing
BOSTON -- Fidelity Investments®, a leading global asset management firm, today announced the launch of the Fidelity Defined Maturity Funds, a series of four national municipal income funds, each with a defined maturity date. Managed by Fidelity’s municipal bond team, recognized for its excellence with various awards over the years1, the Defined Maturity Funds seek to bridge the gap between individual bonds and bond funds, and are the first actively managed municipal bond defined-maturity funds in the market.
The Fidelity Defined Maturity Funds are open-end mutual funds that seek to incorporate some of the attributes of individual bonds2. The funds are professionally managed, diversified portfolios of municipal securities, with defined end dates. The Defined Maturity Funds invest primarily in investment-grade municipal bonds that are generally clustered around the funds’ defined end dates and seek as high a level of current income, exempt from federal income tax, as is consistent with the preservation of capital. To protect existing shareholders and to ensure orderly liquidation of the funds, the Defined Maturity Funds will close to purchases for new and existing investors approximately 12 months prior to their maturity date. Each fund plans to liquidate and distribute its net assets to investors shortly after its defined end date.
“When compared to a traditional bond fund, the price volatility of the Defined Maturity Funds is designed to decline as their underlying bonds approach their maturity. However, unlike individual bonds, these funds do not return a pre-determined amount at the funds’ defined end dates,” said Mark Sommer, co-manager of the Fidelity Defined Maturity Funds. “These funds may be appropriate for income-seeking investors who are interested in combining the defined-maturity feature of individual bonds with the many features of bond funds, including diversification and professional management, thus removing much of the legwork of individual bond investing.”
The initial series consists of four funds with different maturity dates of four years (Fidelity Municipal Income 2015 Fund), six years (Fidelity Municipal Income 2017 Fund), eight years (Fidelity Municipal Income 2019 Fund) and 10 years (Fidelity Municipal Income 2021 Fund).
A Single Investment Approach. Many Ways to Apply It.
The Defined Maturity Funds are flexible investment options designed to help meet the needs of investors by seeking to provide federally tax-exempt income that they can either receive as a distribution or reinvest to maximize payout potential at maturity. Investors could use the Defined Maturity Funds in three potential ways: as an income vehicle, an investment vehicle, or as a laddering opportunity.
1. Generate a federally tax-free income stream: The Defined Maturity Funds 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 may be an appropriate option for investors looking to receive monthly income for their cash flow needs.
2. Reinvest to maximize payout potential: Investors could choose to reinvest distributions in order to maximize a fund’s payout potential at maturity. While the funds do not guarantee a pre-determined amount, their declining price volatility as their defined end dates approach may help investors plan for their financial needs, if they hold the funds to maturity.
3. Build bond ladders 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 Defined Maturity Fund series, investors have the ability to create a laddering strategy by investing in multiple funds across a range of maturities.
Investments in a Defined Maturity Fund are not guaranteed at any time, including at Fund’s defined end date. Unlike individual bonds, these are mutual funds subject to fund management fees and may not be appropriate for bond investors looking for greater control over credit quality and maturity dates. Although the price volatility of the funds is designed to decline as they approach their defined end date, shareholders who sell the fund before this date could experience more price (NAV) uncertainty.
For the complete article.
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