Fidelity Limited Term Municipal Income Fund Q1 2026 Commentary (FSTFX)
Fidelity Investments·2026-06-23·via All Articles on Seeking Alpha
Summary
Tax-exempt municipal bonds were essentially flat in the first quarter of 2026, as a late-period pullback erased early-year gains amid concerns that the Iran war could lead to stagflation – that is, economic stagnation with high inflation.
The Bloomberg Municipal Bond Index returned -0.18% (including interest payments and price changes) for the quarter.
Muni gains accelerated in February (+1.25%) amid still-favorable market technical factors and declining yields, which strengthened bond prices.
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Investment Approach
Fidelity® Limited Term Municipal Income Fund (FSTFX) is a diversified national municipal bond strategy investing in general obligation and revenue- or tax-backed municipal securities across the short-intermediate part of the yield curve.
