Summary

• Fidelity Corporate Bond ETF - NAV Return was -0.48% for the three-month period, which outperformed the -0.55% return of the Morningstar Corporate Bond category average.
• The beginning of March saw a sharp rise in bond yields as expectations for Fed cuts shifted outward once again, and an increased risk premium was priced into the yield curve.
• At quarter end the Fidelity Corporate Bond ETF has substantial investments in Alphabet, Meta Platforms and Oracle, whereas before it had essentially no exposure to AI-related issuers.
• In financials, security selection aided performance, led by underweight exposure to banks, including Goldman Sachs, HSBC and Citigroup.
• Fidelity Corporate Bond ETF added industrial bonds that were trading toward the wider end of credit spreads, aiming to locate issuers offering some measure of relative value.

Taxable Bond Market Review

U.S. taxable investment-grade bonds posted a roughly break-even result in the first quarter, as measured by the Bloomberg U.S. Aggregate Bond Index. A positive start to the year was upended in March by a sudden