Fidelity Launches Active Muni Bond Fund

Fidelity Investments on Wednesday announced the launch of the Fidelity Municipal Core Plus Bond Fund (FMBAX), adding to the investment company’s active fixed income strategies lineup.

The fund is available commission-free and with no investment minimum to individual investors and financial advisors through Fidelity’s online brokerage platforms. It has a 0.37% net expense ratio and a 1.28% gross expense ratio, according to Fidelity.

Measured against the Bloomberg Municipal Bond Index and the Fidelity Municipal Core Plus Bond Composite Index, the Fidelity Municipal Core Plus Bond Fund aims to provide a high current yield exempt from federal income taxes and may also consider capital growth.

With retail and institutional demand for higher yielding municipal bond funds, this new product seeks to offer a strong yield and total return profile, with potentially lower volatility than pure high yield funds, according to Fidelity.

“Fidelity’s growing suite of active fixed income investment products leverage Fidelity’s breadth and depth of resources and expertise as an active manager to identify investment opportunities across the credit spectrum,” Jamie Pagliocco, Fidelity’s fixed income head, said.