The $1 billion AUM threshold is a big one for ETFs, and can indicate a fund has risen into a new tier. That news could arrive at just the right time for the Fidelity Low Duration Bond Factor ETF (FLDR). The strategy could intrigue as rates are about to change, with the fund providing exposure to both floating-rate and fixed-rate debt. That could put FLDR in a stronger position in its own space, poised to outperform.
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FLDR charges a 15 basis point (bps) fee for its approach. The strategy tracks the Fidelity Low Duration Investment Grade Factor Index. That index includes U.S. investment-grade floating-rate notes and U.S. Treasuries maturing in seven to 10 years. Specifically, it looks to maintain a duration of one year or less.
Low Duration Bond ETF FLDR in 2025
That approach has helped the strategy return 6.3% over the last one year period, according to ETF Database data. The low duration bond ETF has added almost $50 million in flows over the last month, as well, speaking to its new milestone in AUM. That represents a significant nearly $400 million increase since the start of 2025, with the fund entering the year at $658 million in AUM.
So, what use case might the fund have moving forward? FLDR can provide some helpful income for curious investors. The low duration bond ETF offered a 4.68% 30-day SEC yield as of September 10. It also offers a 4.87% distribution yield (TTM) as well. That income could prove a big help if portfolio turbulence rises to end 2025 and entering 2026.
FLDR could be a solid option in that short/ultrashort space, thanks to its blended exposure to floating-rate investment grade credit and fixed-rate longer duration Treasuries. For those looking at the category, FLDR has entered a new tier among low duration bond ETF funds that deserves attention.
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Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
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