Better Fidelity Bond ETF: FBND vs. FIGB

Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) and Fidelity Total Bond ETF (NYSEMKT:FBND) both target core bond exposure, but FBND stands out with its massive assets under management (AUM), broader portfolio, higher yield, and lower volatility.

Both FIGB and FBND are fixed-income funds from Fidelity, designed for investors seeking stable income and diversification away from equities. This comparison highlights the key differences in size, yield, diversification, and risk between these two bond ETFs to help investors identify which may better fit their needs.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

Both funds charge the same annual expense, but FBND stands out with a higher yield and much larger assets under management, making it more affordable for investors seeking a higher payout and greater liquidity.

Performance & risk comparison

What's inside

FBND holds an expansive portfolio of 2,742 bonds, with a sector allocation tilted toward energy (95%) and utilities (5%). Its top holdings include Bank Of America 3.419%/var 12/20/28, JPMorgan Chase 4.452%/var 12/05/29, and Goldman Sachs 3.691/var 6/05/28, each representing less than 1% of assets. With over 11 years of history, FBND may appeal to those seeking broad diversification and a higher yield from a well-established fund.

In contrast, FIGB focuses on investment-grade bonds, with all assets classified as cash and others, and a much more concentrated portfolio of 180 holdings. Its largest positions are Goldman Sachs 3.8% 03/15/30, JPMorgan Chase 4.493%/var 3/24/31, and Morgan Stanley 4.431/var 1/23/30, each just over 1.5%. Both funds avoid leverage, currency hedges, or other structural quirks.

FBND holds an expansive portfolio of 2,742 bonds, with a sector allocation tilted toward energy (95%) and utilities (5%). Its top holdings include Bank of America 3.419%/var 12/20/28

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What this means for investors

While Fidelity is the issuer behind both the Fidelity Investment Grade Bond ETF (FIGB) and the Fidelity Total Bond ETF (FBND), there are some noteworthy differences between the two.

FIGB emphasizes high-quality bonds, providing investors with stability and safety. However, its much tighter focus contributes to smaller assets under management compared to FBND, and its lower dividend yield means less money in your wallet in exchange for the higher quality, which also provides lower credit risk.

FBND sports a number of strengths. Its substantially larger assets under management translate into the ETF offering greater liquidity compared to FIGB. Its higher dividend yield is also a plus, especially considering both ETFs have the same expense ratio. In addition, FBND delivers broader diversification given its large bond portfolio.

For investors who want stability and high-quality bonds, FIGB is the better choice. Those investors who want broader market exposure and diversification, and a higher dividend yield in exchange for higher risk should consider FBND.

Glossary

ETF: Exchange-traded fund that holds a basket of assets and trades like a stock.
Fixed income: Investments, like bonds, that pay regular interest and return principal at maturity.
Core bond exposure: Broad bond holdings intended to be a portfolio’s main, diversified fixed‑income component.
Investment-grade bonds: Bonds rated relatively safe, with lower risk of default and typically lower yields.
Dividend yield: Annual cash distributions from a fund divided by its current market price.
Expense ratio: Annual fund operating costs expressed as a percentage of average assets.
Assets under management (AUM): Total market value of all assets managed by a fund.
Beta: Measure of how much a fund’s price moves relative to the overall stock market.
Max drawdown: Largest peak‑to‑trough decline in value over a specific period.
Portfolio diversification: Spreading investments across many securities to reduce the impact of any single holding.
Leverage (in funds): Using borrowed money or derivatives to increase a fund’s exposure beyond its net assets.
Currency hedge: Strategy used by funds to reduce the impact of foreign exchange rate movements on returns.

Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Robert Izquierdo has positions in Bank of America and JPMorgan Chase. The Motley Fool has positions in and recommends Goldman Sachs Group and JPMorgan Chase. The Motley Fool has a disclosure policy.