FBND Is Great, but Fidelity’s Other High Yield ETF Pays Twice As Much

Investors who want to focus on steady monthly payouts often look for investments that don’t expose them to excessive credit risk. For this reason, the Fidelity Total Bond ETF (NYSE:FBND) has become a go-to choice for Fidelity investors. Delivering a 4.62% yield, this fund functions as a core bond position that works well for portfolios of all shapes and sizes. 

However, it also makes sense that there are always going to be investors who want more, and so they look at Fidelity for other options that could pay twice as much. The good news is that Fidelity’s high-yield lineup includes funds that push yields into the mid-six percent range while still paying monthly. These ETFs may carry more risk, but they are also ideal for investors seeking stronger cash flow than a traditional core bond can provide. 

The Case for Looking Beyond Fidelity’s Total Bond ETF

As it stands today, the Fidelity Total Bond ETF is classified in the intermediate core-plus category and prioritizes stability. Given that it holds about 80% of its assets in investment-grade bonds and has delivered competitive long-term returns, the trade-off is clear. 

Because the fund avoids lower-rated credit, the yield stays comfortably in the 4% range. Income-oriented investors are also increasingly willing to explore bond ETFs with broader mandates if it means increasing their monthly cash flow. This is where Fidelity’s high-yield ETF lineup becomes a compelling choice. 

Ultimately, the fund and funds like it help amplify your income, all while adding tactical credit exposure and still being able to maintain the convenience of monthly distributions. 

Fidelity Enhanced High Yield ETF

One of the best alternatives Fidelity offers is the Fidelity Enhanced High Yield ETF (NYSE:FDHY), which yields 6.59%, double that of the Fidelity Total Bond ETF. Investing in high-yield corporate bonds, the fund pays monthly and is currently on pace to distribute $3.24 per share. 

This ETF is designed for investors who are comfortable taking on additional credit risk in exchange for higher cash flow. On the plus side, it’s diversified across issuers, sectors, and maturities, which helps reduce overall volatility in place of individual bond picking. 

Fidelity Sustainable High Yield ETF

The Fidelity Sustainable High Yield ETF (NYSE:FSYD) offers a 6.53% yield and a $3.16 annual payout per share. On top of this, there is a sustainability screen on top of the traditional high-yield bond selection for investors who want higher income, without feeling like they have to compromise on basic ESG considerations that can gravitate toward this fund. 

Best of all, the growth rate only sits at around 2.16%, which is lower than the Fidelity Total Bond ETF, but it also means there is more limited exposure to risk and can even help smooth out performance if credit markets weaken. 

Fidelity Limited Term Bond ETF

Offering a dividend yield rate of 4.31%, the Fidelity Limited Term Bond ETF (NYSE:FLTB) is very close to the Fidelity Total Bond ETF as far as both strategy and risk. This said, there is an average maturity that is on the shorter end with the Fidelity Limited Term Bond ETF, though it holds up much better when there is rate volatility in the market. 

Paying out monthly, there is a $2.18 annual dividend, and it has produced strong dividend growth, hovering around 9.37%. You won’t get a similar amount in terms of raw income with the $2.18 annual dividend payout, but this ETF can act as a bridge that offsets the more conservative approach of the Fidelity Total Bond ETF and the high-yield flexibility of others like the Fidelity Enhanced High Yield ETF. In other words, this ETF is there to help keep the ship steady during rocky market times.