The firm launched Fidelity Limited Term Bond Fund, Fidelity
Conservative Income Municipal Bond Fund and Fidelity Short Duration High Income
Fund (adviser and retail shares classes).
“A top concern for many bond investors today is their
exposure to interest rate risk and the negative impact rising rates could have
on their bond portfolios,” says Charlie Morrison, president of Fidelity’s Fixed
Income division. “For investors seeking to lower this risk, short duration
funds can be an appropriate addition to a well-diversified bond portfolio.”
While the Federal Reserve has indicated it is unlikely to
raise the short-term Fed funds rate in the near term, longer-term rates may
rise if the Fed tapers its bond purchases, Fidelity says. Under these
circumstances, short duration bonds are generally less sensitive to rising
interest rates. Even against a backdrop of declining interest rates over the
past couple of decades, short duration funds have demonstrated the potential to
capture compelling fixed income returns with less volatility.
The three new short duration bond funds are managed with
varying degrees of credit and interest rate exposure, from primarily investment
grade to below investment grade and with weighted average maturities between
six months to five years.
Investors
can learn more about Fidelity’s short duration funds and access educational
videos and investment insights by visiting www.fidelity.com/fidelityshort.
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An analysis by the Employee Benefit Research Institute
(EBRI), based in Washington, D.C., finds the number of employees participating
in plans has increased slightly, although the level of participation is down
slightly. Based on U.S. Census Bureau data, EBRI says the number of employees
participating in a plan rose from 61 million in 2011 to 61.6 million in 2012.
Balancing this out was the fact that the percentage of those who participated
dropped slightly to 39.4% in 2012, compared with 39.7% in 2011.
The EBRI notes in its analysis that retirement plan
participation by employees is strongly tied to macroeconomic factors such as
stock market returns and the labor market. The stronger macroeconomic
conditions of the late 1990s produced higher levels of participation, while
less-positive macroeconomic conditions of the 2000s led to lower levels of
participation.
“The current economic environment is likely to result in
2013 participation numbers that are very similar to 2012, with the potential
for a slight increase, though many other underlying factors will continue to
affect the future direction of this trend,” says Craig Copeland, senior
research associate at EBRI and author of the analysis.
The
analysis points out that retirement plan participation is strongly affected by
the type of employee being measured. For instance, among all 156.5 million
Americans who worked in 2012, 76 million worked for employers or unions that
sponsored a pension or retirement plan, and 61.6 million participated in a
plan. This translates into a sponsorship rate of 48.6% and a participation
level of 39.4%, respectively.
This broad measure of the work force contains all employees,
says Copeland, including self-employed, part-time employees, as well as those
who typically have a looser connection to the work force such as those younger
than age 21 and older than 64. When considering full-time, full-year wage and
salary employees between ages 21 and 64, the analysis finds 60.4% of these
employees worked for employers sponsoring a retirement plan, and 53.5% of the
employees participated in a plan.
According to Copeland, the analysis confirms a long-standing
gap between public- and private-sector rates, with 71.5% of public-sector
employees participating in an employment-based retirement plan versus 39.1% of
private-sector employees.
Other findings from the analysis include:
A number of criteria is associated with lower
levels of retirement plan participation, including being nonwhite, younger,
female, never married, having lower educational attainment, lower earnings,
poorer health status, no health insurance, not working full-time, not working
for the full year, working in service occupations and/or working in farming,
fisheries or forestry;
Those working for smaller firms, private-sector
firms or firms in the “other” (not professional) services industry also are
less likely to participate in a plan than their comparison groups;
Geographic location affects the likelihood of
participating in a retirement plan, with employees in the South and West less
likely to participate in a plan than those in other regions of the country;
The overall percentage of females participating
in a plan is lower than that of males. Yet, when controlling for work status or
earnings, the female participation level actually surpasses that of males; and
Non-native-born Hispanics have substantially
lower participation levels than native-born Hispanics, even when controlling
for age and earnings. Black and native-born Hispanic workers have participation
levels much closer to those of white workers within each age group.
The full analysis, “Employment-Based Retirement Plan Participation: Geographic
Differences and Trends, 2012,” is available in the November EBRI Issue Brief,
which can be found on the EBRI website.