5 Popular Fidelity Bond Funds For Your 401(k)

Forbes

07-06-2025

Many Fidelity funds also have low expense ratios and functional investment strategies—two important ... More qualities for your retirement portfolio.
Fidelity bond funds are generally available within Fidelity-run 401(k)s, making them accessible to millions of retirement savers. Many Fidelity funds also have low expense ratios and functional investment strategies—two important qualities for your retirement portfolio.
Let's explore five popular Fidelity bond funds now. One may be the right candidate to provide essential bond exposure and help you reach your retirement goals.
The following parameters helped identify the five bond funds highlighted below:
Fund fees and charges dilute your returns. Considering that you may hold your retirement portfolio for 50 years or more, keeping these costs low can make a significant difference in your wealth over time.
Five Fidelity bond funds to consider for your 401(k) are:
A closer review of each fund follows.
FIPDX by the numbers:
The Fidelity Inflation-Protected Bond Index Fund invests in TIPS. These are U.S. Treasury-issued bonds that adjust in value according to inflation, as measured by the Consumer Price Index. These bonds have a fixed interest rate, but the interest payment is calculated from the bond's value and rate. Therefore, when the bond's value rises due to inflation, the payment also increases. This protects the purchasing power of the bond's income over time.
Note that TIPS inflation adjustments can be positive or negative. If prices fall, TIPS lose value and produce lower income.
FIPDX pays distributions quarterly. Per-share payouts over the last four quarters have ranged from $0.031 to $0.145.
FIPDX is a good choice for savers interested in income that outperforms inflation. The fund is particularly relevant now, as new U.S. tariff policies have stoked inflation concerns. That's one reason why FIPDX has returned more than 5.6% over the past year. Worries about rising prices and an economic downturn have benefited TIPS prices.
FCNVX by the numbers:
The Fidelity Conservative Income Bond Fund invests in high-quality, investment-grade Treasury bonds (18.5%), corporate bonds (54.5%), asset-backed securities (14%) and cash (13%). Investment-grade describes debt securities that have a low default risk, according to ratings assigned by S&P Global Ratings, Fitch and Moody's.
FCNVX is a short-term portfolio, meaning most of the debts mature in two years or less. About one-third of the assets reprice within 30 days. Short maturities encourage pricing stability, since matured bonds can be replaced frequently with new issues carrying market interest rates. By comparison, longer maturities are more reactive to interest rate changes, losing value when rates rise and gaining value when rates fall.
FCNVX is for the debt investor who wants competitive yields with low risk. The inclusion of highly rated corporate bonds and asset-backed securities encourages a higher yield than Treasury debts alone can provide, without adding undue risk. Also, the emphasis on short maturities limits price volatility related to interest rates.
FAPGX by the numbers:
The Fidelity Sustainable Low Duration Bond Fund invests in medium and high-quality, investment-grade Treasury debt (34.5%), corporate bonds (50%) and asset-backed securities (15.5%) with maturities of less than three years. Issuers must also pass an ESG screen to be included in the portfolio.
ESG stands for environmental, social and governance, the three pillars of sustainability tracking and reporting. Agencies and companies with good ESG scores are actively managing their impacts on people and the planet.
FAPGX aligns with the needs of moderately conservative investors who like supporting sustainability initiatives.
More than one-third (40%) of the fund's holdings mature in six months or less, which limits interest-rate sensitivity. The credit ratings within the portfolio range from AAA to BBB, which are all investment-grade. Medium-quality investment-grade holdings, rated BBB, account for 18% of the portfolio. This pushes the fund's yield slightly higher without an excessive risk increase.
FXNAX by the numbers:
The Fidelity U.S. Bond Index Fund tracks the Bloomberg U.S. Aggregate Bond Index, a benchmark for the entire domestic, investment-grade bond market. The portfolio includes Treasury debt (45%), corporate debt (25%), mortgage-backed securities (25%), plus other government-related debts and cash.
Maturities span from ultrashort to beyond 20 years. The largest maturity concentration is 39% in five-to-10-year issues. The portfolio's weighted average maturity is just over eight years.
FXNAX suits investors who want broad exposure to U.S. bonds with slightly more risk and yield than Treasury debt alone. This portfolio has some interest-rate sensitivity since it includes intermediate and long-term maturities. But, this may work in your favor. Some experts believe it's a good time to invest in intermediate-term bonds for higher yields with low risk.
Note that bond funds have less predictable income patterns than individual bonds due to the fund's diversification, strategy and trading actions.
FUAMX by the numbers:
The Fidelity Intermediate Treasury Bond Index Fund invests in Treasury bonds with maturities ranging from five to 10 years. The intermediate-term approach secures higher yields for the next several years. It could also encourage a price increase for this fund if market rates decline.
Treasury debt is investment-grade, with an AA rating from the three main credit rating agencies. While AA is one step below the highest rating of AAA, it still implies a very low default risk.
Investors who believe in the full faith and credit of the U.S. government will prefer FUAMX over more diversified bond portfolios. FUAMX has no corporate bonds or asset-backed securities.
At one time, U.S. Treasury debt was considered as safe as cash. In recent years, some experts have suggested the risk of Treasury securities is rising due to inflation and high deficits. Moody's downgraded the U.S. government's credit score this year, following similar actions by Fitch in 2023 and S&P Global Ratings in 2011.
Investment-grade bond funds complement stock positions within a retirement portfolio. Bonds provide predictability and income, while stocks deliver growth potential. If you're not sure how much to own of each category, see How To Decide How Much To Invest In Stocks Vs. Bonds for essential strategies.