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As the Baby Boomers near retirement, their attention is turning to investments that generate consistent, reliable income. A host of asset classes generate income, including bonds, dividend-paying equities, real estate, and convertible securities.
A number of Fidelity funds invest in these securities for the purpose of generating income and capital appreciation, including traditional fixed-income funds, equity funds, hybrids of the two, and specialized funds. We can help you find a fund that suits your specific income needs.
Bond funds contain interest rate risk (as interest rates rise, bond prices usually fall); the risk of issuer default; and inflation risk.
Changes in real estate values or economic conditions can have a positive or negative effect on issuers in the real estate industry, which may affect the fund.
Lower–quality securities generally offer higher yields, but also carry more risk of default or price changes due to potential changes in the credit quality of the issuer.
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| Fidelity Tax-Free Bond Fund | Fidelity Total Bond Fund |
Fidelity High Income Fund | Fidelity Puritan Fund | Fidelity Strategic Dividend & Income Fund |
Fidelity Real Estate Income Fund |
Investment Approach |
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| Investment– grade muni debt securities exempt from federal income tax | 80% in debt of all types and up to 20% in high–yield or emerging market debt |
Lower–quality high–yield debt | 60% in stocks and 40% in bonds when outlook is neutral | Generally, 50% in common stock, remainder in preferred stock, REITs, convertibles |
REITs and debt of real estate entities |
Role in Performance |
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| Possible choice for those concerned with taxes/AMT | Diversifies among investment– grade, high–yield, and emerging bonds |
Drives yield and return with lower–quality debt securities | Combines both equity and bond exposure | Return potential, plus benefit of yield | Helps diversify a portfolio. High potential yield. Tax issues to consider. |
Other Fidelity Funds¹ |
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Select a fund name to view all fund performance, risk, and fee information.
¹Does not include all available funds within asset categories.
View All Available Fidelity Funds
Types of Funds
- Fixed–Income – Fidelity offers a variety of fixed–income funds, including municipal, taxable, and high–yield bond funds. All of the offerings provide a varying degree of income, portfolio diversification, and tax–efficiency.
- Hybrid – Fidelity’s hybrid funds provide exposure to a mix of bond investments and dividend–paying equities. Generally, these portfolios will have higher risk than pure fixed–income funds, but lower volatility than equity–only funds.
- Equity – Several Fidelity funds invest a large portion of their portfolios in dividend–paying equity investments, typically large–cap stocks. These funds provide broad diversification, participation in equity market growth, and some dividend income.
- Specialized – Specialized Fidelity funds invest in non–traditional asset classes, including real estate and convertible securities. They provide income as well as diversification.
More on Income-Producing Funds
Before investing, consider the fund’s investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus containing this information. Read it carefully.
