Retirement investing is often about finding the right balance between risk and reward. Most retirees want reliable income, steady growth and investments that do not come with high fees and undue volatility. Fidelity offers a broad lineup of exchange-traded funds, or ETFs, that can help meet those goals.
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The seven Fidelity ETFs below cover stocks, bonds and higher-yield investments. Together, they can provide income while helping investors manage risk. Many also have lower expenses than competing funds, allowing retirees to keep more of what they earn. Here is a closer look at each fund and why it may deserve a place in a retirement portfolio:
| Fidelity ETF | Expense Ratio | Yield* |
| Fidelity High Dividend ETF (ticker: FDVV) | 0.15% | 2.9% |
| Fidelity Low Volatility Factor ETF (FDLO) | 0.15% | 1.4% |
| Fidelity Total Bond ETF (FBND) | 0.36% | 4.7% |
| Fidelity Corporate Bond ETF (FCOR) | 0.36% | 4.6% |
| Fidelity Limited Term Bond ETF (FLTB) | 0.25% | 4.4% |
| Fidelity Low Duration Bond Factor ETF (FLDR) | 0.15% | 4.3% |
| Fidelity Enhanced High Yield ETF (FDHY) | 0.35% | 6.5% |
*For the trailing-12-month period, as of mid-July. Source: Yahoo Finance.
Fidelity High Dividend ETF (FDVV)
The Fidelity High Dividend ETF focuses on large and midsize companies that pay above-average dividends. The fund owns about 100 stocks, with many of its biggest holdings including well-known companies such as Nvidia Corp. (NVDA), Apple Inc. (AAPL) and Microsoft Corp. (MSFT). Financial companies and technology firms make up a large share of the portfolio. FDVV charges an annual expense ratio of just 0.15%, which is much lower than many competing dividend funds. It currently offers a trailing dividend yield of about 2.9%, giving investors more income than many broad stock market funds.
For retirees, FDVV offers two important benefits. First, it provides the opportunity for long-term growth because it remains invested in stocks. Second, the higher dividend payments can create a more dependable stream of income. Since the fund’s fees are low, investors keep more of those dividend payments instead of losing them to management costs.
Fidelity Low Volatility Factor ETF (FDLO)
The Fidelity Low Volatility Factor ETF invests in large and midsize U.S. companies that have historically experienced smaller price swings than the overall stock market. The portfolio includes more than 100 companies, with major holdings such as Apple, Alphabet Inc. (GOOG, GOOGL), Microsoft, Amazon.com Inc. (AMZN) and Broadcom Inc. (AVGO). Like FDVV, the fund charges a low expense ratio of 0.15%.
Many retirees appreciate investments that reduce sharp ups and downs. Large market declines can be especially difficult when you are withdrawing money instead of adding to your investments. Funds like FDLO aim to smooth out those swings while still allowing investors to participate in stock market growth. Although no stock fund is immune to losses, lower volatility may help retirees stay invested during difficult markets instead of selling at the worst possible time.
Fidelity Total Bond ETF (FBND)
FBND is an actively managed bond fund that invests primarily in investment-grade corporate bonds, U.S. government bonds and mortgage-backed securities. The managers also have limited flexibility to invest in higher-yield and emerging-market bonds when they believe opportunities exist. The fund has an expense ratio of 0.36% and currently yields about 4.7%, with income paid monthly.
For retirees, FBND can serve as the foundation of the bond portion of a portfolio. Its broad mix of bonds provides diversification while generating regular monthly income. The active management team also works to identify opportunities that may improve returns beyond what a traditional index fund can provide. Monthly income can be especially valuable for retirees who use investment earnings to help pay everyday living expenses.
Fidelity Corporate Bond ETF (FCOR)
The Fidelity Corporate Bond ETF invests mainly in investment-grade corporate bonds issued by companies in the U.S. and around the world. Investment-grade bonds generally offer higher yields than government bonds while still maintaining relatively strong credit quality. FCOR charges an expense ratio of 0.36% and currently yields around 4.6%, with monthly income distributions.
This fund can work well alongside a broader bond fund like FBND. While FBND owns several different types of bonds, FCOR focuses specifically on corporate debt. That added focus may increase income without taking on the higher risks associated with lower-quality bonds. For retirees looking to boost income while staying within investment-grade securities, FCOR can be a useful addition.
[Read: 7 Best Schwab ETFs for Retirement]
Fidelity Limited Term Bond ETF (FLTB)
The Fidelity Limited Term Bond ETF invests primarily in investment-grade bonds with average maturities between two and five years. Its holdings include corporate bonds, asset-backed securities and government debt. The fund charges an expense ratio of 0.25% and currently yields approximately 4.4%.
Because the bonds mature sooner than those in many traditional bond funds, FLTB is generally less sensitive to changing interest rates. That means its price often remains more stable when rates move higher. Many retirees prefer this added stability because it can reduce the ups and downs in the bond portion of a portfolio while still providing attractive income.
Fidelity Low Duration Bond Factor ETF (FLDR)
FLDR focuses on very short-term, investment-grade bonds, including floating-rate securities and U.S. Treasury investments. The portfolio maintains an average duration of about one year or less, making it much less sensitive to interest rate changes than longer-term bond funds. The expense ratio is just 0.15%, and the fund currently yields about 4.3%.
Retirees who want a conservative place to keep cash reserves or short-term savings may find FLDR appealing. While it is not designed to deliver high returns, it seeks to preserve principal while producing more income than many traditional cash alternatives. Its combination of stability, low fees and regular income makes it a practical choice for conservative investors.
Fidelity Enhanced High Yield ETF (FDHY)
The Fidelity Enhanced High Yield ETF invests primarily in high-yield corporate bonds, sometimes called junk bonds. These bonds pay higher interest because the companies issuing them carry greater credit risk. Rather than simply tracking an index, Fidelity’s managers actively select bonds they believe offer attractive opportunities while managing risk. FDHY charges an expense ratio of 0.35% and currently yields about 6.5%.
The higher yield can provide a meaningful boost to retirement income, but investors should understand that higher-yield bonds can experience greater price swings and carry a higher risk of default than investment-grade bonds. For that reason, many retirees use FDHY as a smaller position within a diversified portfolio rather than making it a primary holding.
Putting the Funds Together
Each of these Fidelity ETFs serves a different purpose, and together they create a well-rounded retirement toolkit:
— FDVV and FDLO provide stock market exposure while emphasizing dividends and lower volatility. They help maintain long-term growth potential without relying entirely on faster-growing, more volatile companies.
— FBND, FCOR, FLTB and FLDR offer several ways to build the bond portion of a portfolio. Investors can choose the mix that best fits their comfort level with interest rate risk, income needs and desire for stability.
— FDHY adds another layer by providing the opportunity for higher income. While it comes with additional risk, a modest allocation may increase overall portfolio income for investors who can tolerate more volatility.
No single ETF is likely to meet every retirement need on its own. Instead, many investors combine several funds to create a diversified portfolio that reflects their financial goals, expected retirement spending and willingness to accept risk.
One of the biggest strengths shared by all seven funds is cost. Fidelity has built a reputation for offering low-cost investment products, and these ETFs continue that tradition. Lower expenses may seem small from year to year, but they can make a meaningful difference over a retirement that could last 20 to 30 years or longer.
Retirement investing is about more than chasing the highest return. It is about creating dependable income, protecting savings and giving yourself the confidence to stay invested through changing markets. These Fidelity ETFs offer a flexible starting point for building a retirement portfolio designed to accomplish those goals.
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7 Best Fidelity ETFs for Retirees originally appeared on usnews.com
