This
example
helps
compare the cost of investing in the fund with the cost of investing in other
funds.
Let's say, hypothetically, that the annual return for shares of
the fund is 5% and that the fees and the annual operating expenses for shares of
the fund are exactly as described in the fee table. This example illustrates the
effect of fees and expenses, but is not meant to suggest actual or expected fees
and expenses or returns, all of which may vary. For every $10,000 you invested,
here's how much you would pay in total expenses if you sell all of your shares
at the end of each time period indicated:
1
year |
$
|
15
|
3
years |
$
|
48
|
5
years |
$
|
85
|
10
years |
$
|
192
|
Portfolio
Turnover
The
fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate
was 45 %
of the average value of its portfolio.
Principal
Investment Strategies
- Normally
investing at least 80% of assets in securities included in the Fidelity Low
Duration Investment Grade Factor IndexSM.
The index is designed to optimize the balance of interest rate risk and credit
risk such that both returns and risk measures may be improved relative to
traditional U.S. investment grade floating rate note indices. The index is
comprised solely of U.S. investment grade floating rate notes and U.S.
Treasury notes.
- Normally
maintaining a duration of 1 year or less.
- Using
statistical sampling techniques based on duration, maturity, interest rate
sensitivity, security structure, and credit quality to attempt to replicate
the returns of the Fidelity Low Duration Investment Grade Factor Index℠ using
a smaller number of securities.
- Lending
securities to earn income for the fund.
Principal
Investment Risks
Interest
rate increases can cause the price of a debt security to decrease.
Securities
with floating interest rates can be less sensitive to interest rate changes than
securities with fixed interest rates, but may decline in value if their interest
rates do not rise as much, or as quickly, as interest rates in general. Floating
rate notes typically carry lower yields than fixed rate notes of the same
maturity.
- Financial
Services Concentration.
Changes
in government regulation and interest rates and economic downturns can have a
significant negative effect on issuers in the financial services sector,
including the price of their securities or their ability to meet their payment
obligations.
The
ability of an issuer of a debt security to repay principal prior to a security's
maturity can cause greater price volatility if interest rates change.
The
value of an individual security or particular type of security can be more
volatile than, and can perform differently from, the market as a whole.
A
decline in the credit quality of an issuer or a provider of credit support or a
maturity-shortening structure for a security can cause the price of a security
to decrease.
- Fluctuation
of Net Asset Value and Share Price.
The
net asset value per share (NAV) of the fund will generally fluctuate with
changes in the market value of the fund's holdings. The fund's shares can be
bought and sold in the secondary market at market prices. Disruptions to
creations and redemptions, the existence of extreme market volatility or
potential lack of an active trading market for the fund's shares may result in
the fund's shares trading significantly above (at a premium) or below (at a
discount) to NAV.
In
addition, in stressed market conditions or periods of market disruption or
volatility, the market for shares may become less liquid in response to
deteriorating liquidity in the markets for the fund's underlying portfolio
holdings.
The
performance of the fund and its underlying index may vary somewhat due to
factors such as fees and expenses of the fund, transaction costs, sample
selection, regulatory restrictions, and timing differences associated with
additions to and deletions from the index. Errors in the construction or
calculation of the index may occur from time to time and may not be identified
and corrected for some period of time, which may have an adverse impact on the
fund and its shareholders.
The
fund is managed with a passive investment strategy, attempting to track the
performance of an unmanaged index of securities, regardless of the current or
projected performance of the fund's index or of the actual securities included
in the index. This differs from an actively managed fund, which typically seeks
to outperform a benchmark index. As a result, the fund's performance could be
lower than actively managed funds that may shift their portfolio assets to take
advantage of market opportunities or lessen the impact of a market decline or a
decline in the value of one or more issuers.
The
fund will be concentrated to approximately the same extent that the fund's index
concentrates in the securities of issuers in a particular industry.
- Factor-Based
Strategy Risk.
Although
the fund's underlying index uses a rules-based proprietary index methodology
that seeks to optimize the balance of certain risks, there is no guarantee that
this methodology will be successful.
There
can be no assurance that an active trading market will be maintained. Market
makers and Authorized Participants are not obligated to make a market in the
fund's shares or to submit purchase and redemption orders for creation units. In
addition, trading may be halted, for example, due to market conditions.
Unlike
certain ETFs, the fund may effect some or all creations and redemptions using
cash, rather than in-kind securities. As a result, an investment in the fund may
be less tax-efficient than an investment in an ETF that distributes portfolio
securities entirely in-kind.
An
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency .
You
could lose money by investing in the fund.
Unlike
individual debt securities, which typically pay principal at maturity, the value
of an investment in the fund will fluctuate.
Performance
The
following information is intended to help you understand the risks of investing
in the fund.
The
information illustrates the changes in the performance of the fund's shares from
year to year and compares the performance of the fund's shares to the
performance of a securities market index and an additional index over various
periods of time. The
indexes have characteristics relevant to the fund's investment strategies. Index
descriptions appear in the "Additional Index Information" section of the
prospectus. Past
performance (before and after taxes) is not an indication of future
performance.
Visit
www.fidelity.com
for
more recent performance information.
Year-by-Year
Returns
|
|
|
|
|
|
|
|
2019
|
2020
|
2021
|
|
|
|
|
|
|
|
|
4.51 %
|
1.98 %
|
-
0.04 %
|
During
the periods shown in the chart: |
Returns
|
Quarter
ended |
Highest
Quarter Return |
3.56
%
|
June
30, 2020 |
Lowest
Quarter Return |
-
2.20 %
|
March
31, 2020 |
Year-to-Date
Return |
-
1.61 %
|
September
30, 2022 |
Average
Annual Returns
After-tax
returns are calculated using the historical highest individual federal marginal
income tax rates, but do not reflect the impact of state or local taxes.
Actual
after-tax returns may differ depending on your individual circumstances.
The
after-tax returns shown are not relevant if you hold your shares in a retirement
account or in another tax-deferred arrangement, such as an employee benefit plan
(profit sharing, 401(k), or 403(b) plan). Return
After Taxes on Distributions and Sale of Fund Shares may be higher than other
returns for the same period due to a tax benefit of realizing a capital loss
upon the sale of fund shares.
For
the periods ended December 31, 2021 |
Past
1
year
|
Life
of
fund
A
|
Fidelity®
Low Duration Bond Factor ETF |
|
|
Return
Before Taxes |
-
0.04
%
|
%
|
Return
After Taxes on Distributions |
-
0.25
%
|
%
|
Return
After Taxes on Distributions and Sale of Fund Shares
|
-
0.03 %
|
%
|
Fidelity
Low Duration Investment Grade Factor Index℠
(reflects
no deduction for fees, expenses, or taxes) |
0.14
%
|
%
|
Bloomberg
US Treasury Bill: 6-9 Months Index
(reflects
no deduction for fees, expenses, or taxes) |
0.05
%
|
%
|
|
|
|
Investment
Adviser
Fidelity
Management & Research Company LLC (FMR) (the Adviser) is the fund's manager.
Other investment advisers serve as sub-advisers for the fund.
Portfolio
Manager(s)
Brandon
Bettencourt (Co-Portfolio Manager) has managed the fund since 2018.
Richard
Munclinger (Co-Portfolio Manager) has managed the fund since 2020.
Purchase
and Sale of Shares
Shares
of the fund are listed and traded on an exchange, and individual fund shares may
only be bought and sold in the secondary market through a broker or dealer at
market price. These transactions, which do not involve the fund, are made at
market prices that may vary throughout the day, rather than at NAV. Shares of
the fund may trade at a price greater than the fund's NAV (premium) or less than
the fund's NAV (discount). An investor may incur costs attributable to the
difference between the highest price a buyer is willing to pay to purchase
shares (bid) and the lowest price a seller is willing to accept for shares (ask)
when buying or selling fund shares in the secondary market (the "bid-ask
spread"). Recent information, including information regarding the fund's NAV,
market price, premiums and discounts, and bid-ask spread, is available at
www.fidelity.com.
Tax
Information
Distributions
you receive from the fund are subject to federal income tax and generally will
be taxed as ordinary income or capital gains, and may also be subject to state
or local taxes, unless you are investing through a tax-advantaged retirement
account (in which case you may be taxed later, upon withdrawal of your
investment from such account).
Payments
to Broker-Dealers and Other Financial Intermediaries
The
fund, the Adviser, Fidelity Distributors Company LLC (FDC), and/or their
affiliates may pay intermediaries, which may include banks, broker-dealers,
retirement plan sponsors, administrators, or service-providers (who may be
affiliated with the Adviser or FDC), for the sale of fund shares and related
services. These payments may create a conflict of interest by influencing your
intermediary and your investment professional to recommend the fund over another
investment. Ask your investment professional or visit your intermediary's web
site for more information.
Fund
Basics
Investment
Objective
Fidelity®
Low Duration Bond Factor ETF seeks to provide investment returns that
correspond, before fees and expenses, generally to the performance of the
Fidelity Low Duration Investment Grade Factor Index℠.
Principal
Investment Strategies
The
Adviser normally invests at least 80% of the fund's assets in securities
included in the Fidelity Low Duration Investment Grade Factor Index SM
.
The index is designed to optimize the balance of interest rate risk and credit
risk, such that both returns and risk measures may be improved relative to
traditional U.S. investment grade floating rate note indices.
The
universe of securities is intended to reflect a blend of two components: U.S.
corporate floating rate notes with less than 5 years maturity and U.S. Treasury
Notes with 7 to 10 years maturity.
The
fund may not always hold all of the same securities as the Fidelity Low Duration
Investment Grade Factor Index SM
.
The Adviser may use statistical sampling techniques to attempt to replicate the
returns of the index using a smaller number of securities. Statistical sampling
techniques attempt to match the investment characteristics of the index and the
fund by taking into account such factors as duration, maturity, interest rate
sensitivity, security structure, and credit quality.
The
fund may not track the Fidelity Low Duration Investment Grade Factor
Index SM
because
differences between the index and the fund's portfolio can cause differences in
performance. In addition, expenses and transaction costs, the size and frequency
of cash flows into and out of the fund, and differences between how and when the
fund and the index are valued can cause differences in performance.
The
fund may lend securities to broker-dealers or other institutions to earn
income.
The
fund normally maintains a duration of 1 year or less. Duration is a measure of a
bond's price sensitivity to a change in interest rates. For example, if a bond
has a 1-year duration and interest rates rise 1%, the bond's value is likely to
fall about 1%. Similarly, if a bond fund has a 1-year duration and interest
rates rise 1%, the fund's value is likely to fall about 1%.
The
fund will invest more than 25% of its total assets in securities of issuers in a
particular industry to approximately the same extent that the fund's index
concentrates in the securities of issuers in a particular industry.
If
the Adviser's strategies do not work as intended, the fund may not achieve its
objective.
Description
of Principal Security Types
Debt
securities are
used by issuers to borrow money. The issuer usually pays a fixed, variable, or
floating rate of interest, and must repay the amount borrowed, usually at the
maturity of the security. Some debt securities, such as zero coupon bonds,
do not pay current interest but are sold at a discount from their face
values. Floating rate notes are debt securities with interest rates that
reset or adjust periodically by reference to a benchmark interest
rate. Debt securities include corporate bonds, government securities
(including Treasury securities), repurchase agreements, money market securities,
mortgage and other asset-backed securities, loans and loan participations, and
other securities believed to have debt-like characteristics, including hybrids
and synthetic securities.
U.S.
Government securities are
high-quality securities issued or guaranteed by the U.S. Treasury or by an
agency or instrumentality of the U.S. Government. U.S. Government securities may
be backed by the full faith and credit of the U.S. Treasury, the right to borrow
from the U.S. Treasury, or the agency or instrumentality issuing or guaranteeing
the security.
U.S.
Government securities include mortgage and other asset-backed securities.
Derivatives
are
investments whose values are tied to an underlying asset, instrument, currency,
or index. Derivatives include futures, options, forwards, and swaps, such
as interest rate swaps (exchanging a floating rate for a fixed rate), total
return swaps (exchanging a floating rate for the total return of an index,
security, or other instrument or investment) and credit default swaps (buying or
selling credit default protection).
Principal
Investment Risks
Many
factors affect the fund's performance. Developments that disrupt global
economies and financial markets, such as pandemics and epidemics, may magnify
factors that affect a fund's performance. The fund's share price and yield
change daily based on changes in market conditions and interest rates and in
response to other economic, political, or financial developments. The fund's
reaction to these developments will be affected by the types and maturities of
securities in which the fund invests, the financial condition, industry and
economic sector, and geographic location of an issuer, and the fund's level of
investment in the securities of that issuer. Unlike individual debt securities,
which typically pay principal at maturity, the value of an investment in the
fund will fluctuate. When you sell your shares they may be worth more or less
than what you paid for them, which means that you could lose money by investing
in the fund.
T
he
following factors can significantly affect the fund's performance:
Interest
Rate Changes. Debt
securities, including money market securities, have varying levels of
sensitivity to changes in interest rates. In general, the price of a debt
security can fall when interest rates rise and can rise when interest rates
fall. Securities with longer maturities and certain types of securities, such as
mortgage securities and the securities of issuers in the financial services
sector, can be more sensitive to interest rate changes, meaning the longer the
maturity of a security, the greater the impact a change in interest rates could
have on the security's price. Short-term and long-term interest rates do not
necessarily move in the same amount or the same direction. Short-term securities
tend to react to changes in short-term interest rates, and long-term securities
tend to react to changes in long-term interest rates. Securities whose payment
at maturity is based on the movement of all or part of an index and
inflation-protected debt securities may react differently from other types of
debt securities. In market environments where interest rates are rising, issuers
may be less willing or able to make principal and/or interest payments on
securities when due. The discontinuation and replacement of London Interbank
Offered Rate (LIBOR) (an indicative measure of the average interest rate at
which major global banks could borrow from one another) and other benchmark
rates may have a significant impact on the financial markets and may adversely
impact a fund's performance.
Floating
Rate Notes. Securities
with floating interest rates can be less sensitive to interest rate changes than
securities with fixed interest rates, but may decline in value if their interest
rates do not rise as much, or as quickly, as interest rates in general.
Conversely, floating rate securities typically will not increase in value if
interest rates decline. A decline in interest rates may result in a reduction in
income received from floating rate notes held by the fund and may adversely
affect the fund's NAV. Securities with longer durations tend to be more
sensitive to interest rate changes and thus are usually more volatile than
securities with shorter durations.
Financial
Services Concentration. Financial
services companies are highly dependent on the supply of short-term financing
and can be sensitive to changes in government regulation and interest rates and
to economic downturns in the United States and abroad. These events can
significantly affect the price of issuers' securities as well as their ability
to make payments of principal or interest or otherwise meet obligations on
securities or instruments for which they serve as guarantors or
counterparties.
Prepayment.
Many
types of debt securities, including mortgage securities, are subject to
prepayment risk. Prepayment risk occurs when the issuer of a security can repay
principal prior to the security's maturity. Securities subject to prepayment can
offer less potential for gains during a declining interest rate environment and
similar or greater potential for loss in a rising interest rate environment. In
addition, the potential impact of prepayment features on the price of a debt
security can be difficult to predict and result in greater volatility.
Issuer-Specific
Changes. Changes
in the financial condition of an issuer or counterparty (e.g., broker-dealer or
other borrower in a securities lending transaction), changes in specific
economic or political conditions that affect a particular type of security or
issuer, and changes in general economic or political conditions can increase the
risk of default by an issuer or counterparty, which can affect a security's or
instrument's credit quality or value. Entities providing credit support or a
maturity-shortening structure also can be affected by these types of changes,
and if the structure of a security fails to function as intended, the security
could decline in value.
Fluctuation
of Net Asset Value and Share Price. The
NAV of the fund's shares will generally fluctuate with changes in the market
value of the fund's holdings. The fund's shares are listed on an exchange and
can be bought and sold in the secondary market at market prices. The market
prices of shares will fluctuate in accordance with changes in NAV and supply and
demand on the listing exchange. Although a share's market price is expected to
approximate its NAV, it is possible that the market price and NAV will vary
significantly. As a result, you may sustain losses if you pay more than the
shares' NAV when you purchase shares, or receive less than the shares' NAV when
you sell shares, in the secondary market. During periods of disruptions to
creations and redemptions, the existence of extreme market volatility, or lack
of an active trading market for the fund's shares, the market price of fund
shares is more likely to differ significantly from the fund's NAV. During such
periods, you may be unable to sell your shares or may incur significant losses
if you sell your shares. There are various methods by which investors can
purchase and sell shares and various orders that may be placed. Investors should
consult their financial intermediary before purchasing or selling shares of a
fund. Disruptions at market makers, Authorized Participants or market
participants may also result in significant differences between the market price
of the fund's shares and the fund's NAV. In addition, in stressed market
conditions
or periods of market disruption or volatility, the market for shares may become
less liquid in response to deteriorating liquidity in the markets for the fund's
underlying portfolio holdings.
The
market price of shares during the trading day, like the price of any
exchange-traded security, includes a bid-ask spread charged by the exchange
specialist, market makers, or other participants that trade the particular
security. In times of severe market disruption or volatility, the bid-ask spread
can increase significantly. At those times, shares are most likely to be traded
at a discount to NAV, and the discount is likely to be greatest when the price
of shares is falling fastest, which may be the time that you most want to sell
your shares. The Adviser expects that, under normal market conditions, large
discounts or premiums to NAV will not be sustained in the long term because of
arbitrage opportunities.
Correlation
to Index. The
performance of the fund and its index may vary somewhat due to factors such as
fees and expenses of the fund, transaction costs, imperfect correlation between
the fund's securities and those in the index, timing differences associated with
additions to and deletions from the index, and changes in the component
securities. The fund may not be fully invested at times as a result of cash
flows into the fund. The use of sampling techniques or futures or other
derivative positions may affect the fund's ability to achieve close correlation
with the index. In addition, the fund may not be able to invest in certain
securities included in the index or invest in them in the exact proportions in
which they are represented in the index due to regulatory restrictions. Errors
in the construction or calculation of the index may occur from time to time and
may not be identified and corrected for some period of time, which may have an
adverse impact on the fund and its shareholders.
Passive
Management Risk .
An index fund is managed with a passive investment strategy, attempting to track
the performance of an unmanaged index of securities, regardless of the current
or projected performance of the fund's index or of the actual securities
included in the index. This differs from an actively managed fund, which
typically seeks to outperform a benchmark index. As a result, an index fund's
performance could be lower than actively managed funds that may shift their
portfolio assets to take advantage of market opportunities or lessen the impact
of a market decline or a decline in the value of one or more issuers. The
structure and composition of an index fund's index will affect the performance,
volatility, and risk of the index and, consequently, the performance,
volatility, and risk of the fund. The fund will be concentrated to approximately
the same extent that the fund's index concentrates in the securities of issuers
in a particular industry.
Factor-Based
Strategy Risk. Although
the index uses a rules-based proprietary index methodology that seeks to
optimize the balance of certain risks, there is no guarantee that this
methodology will be successful. In addition, there may be periods when a
particular factor is out of favor and therefore, during such periods, the
investment performance of the fund may suffer.
Trading
Issues. Although
shares are listed on an exchange, there can be no assurance that an active
trading market or requirements to remain listed will be met or maintained. Only
an Authorized Participant may engage in creation or redemption transactions
directly with the fund. The fund has a limited number of intermediaries that act
as Authorized Participants. There are no obligations of market makers to make a
market in the fund's shares or of Authorized Participants to submit purchase or
redemption orders for Creation Units. Decisions by market makers or Authorized
Participants to reduce their role with respect to market making or creation and
redemption activities during times of market stress, or a decline in the number
of Authorized Participants due to decisions to exit the business, bankruptcy, or
other factors, could inhibit the effectiveness of the arbitrage process in
maintaining the relationship between the underlying value of the fund's
portfolio securities and the market price of fund shares. To the extent no other
Authorized Participants are able to step forward to create or redeem, shares may
trade at a discount to NAV and possibly face delisting. In addition, trading of
shares in the secondary market may be halted, for example, due to activation of
marketwide circuit breakers. If trading halts or an unanticipated early closing
of the listing exchange occurs, a shareholder may be unable to purchase or sell
shares of the fund. FDC, the distributor of the fund's shares, does not maintain
a secondary market in the shares.
If
the fund's shares are delisted from the listing exchange, the Adviser may seek
to list the fund shares on another market, merge the fund with another
exchange-traded fund or traditional mutual fund, or redeem the fund shares at
NAV.
Shares
of the fund, similar to shares of other issuers listed on a stock exchange, may
be sold short and are therefore subject to the risk of increased volatility and
price decreases associated with being sold short.
Leverage
Risk. Derivatives,
forward-settling securities, and short sale transactions involve leverage
because they can provide investment exposure in an amount exceeding the initial
investment. Leverage can magnify investment risks and cause losses to be
realized more quickly. A small change in the underlying asset, instrument, or
index can lead to a significant loss. Forward-settling securities and short sale
transactions also involve the risk that a security will not be issued,
delivered, available for purchase, or paid for when anticipated. An increase in
the market price of securities sold short will result in a loss. Government
legislation or regulation could affect the use of these transactions and could
limit a fund's ability to pursue its investment strategies.
Cash
Transactions Risk. Unlike
certain ETFs, the fund may effect some or all creations and redemptions using
cash, rather than in-kind securities. Therefore, it may be required to sell
portfolio securities and recognize gains on such sales that the fund might not
have recognized if it were to distribute portfolio securities in-kind. As a
result, an investment in the fund may be less tax-efficient than an investment
in an ETF that distributes portfolio securities entirely in-kind. The use of
cash creations and redemptions may also cause the fund's shares to trade in the
market at greater bid-ask spreads or greater premiums or discounts to the fund's
NAV. Furthermore, cash creation and redemption transactions may result in
certain brokerage, tax, foreign exchange, execution, price movement and other
costs and expenses related to the execution of trades resulting from such
transactions. To the extent that the maximum additional charge for creation or
redemption transactions is insufficient to cover these costs and expenses, the
fund's performance could be negatively impacted.
Other
Investment Strategies
In
addition to the principal investment strategies discussed above, the Adviser may
also use various techniques, such as buying and selling futures contracts,
swaps, and exchange traded funds, to increase or decrease the fund's exposure to
changing security prices, interest rates, credit qualities, or other factors
that affect security values or to gain or reduce exposure to an asset,
instrument, or index.
The
Fidelity Low Duration Investment Grade Factor Index SM
is
constructed using Fidelity's rules-based proprietary index methodology. The
weight of each component in the blend is set to target a duration, which seeks
to optimize the balance of credit risk and interest rate risk. The final weights
of securities within the corporate floating rate notes component are determined
by their market capitalization, subject to an issuer cap of 3.5%.
The
Fidelity Low Duration Investment Grade Factor Index SM
is
rebalanced monthly. Fidelity Product Services LLC (FPS) is the index provider.
FPS is an affiliated person of the Adviser.
Shareholder
Notice
The
following is subject to change only upon 60 days' prior notice to
shareholders:
Fidelity®
Low Duration Bond Factor ETF
normally
invests at least 80% of its assets in securities included in the Fidelity Low
Duration Investment Grade Factor Index S
M
.
The
fund is open for business each day that either the listing exchange or the New
York Stock Exchange (NYSE) is open.
The
NAV is the value of a single share. Fidelity normally calculates NAV as of the
close of regular trading hours on the listing exchange or the NYSE, normally
4:00 p.m. Eastern time. The fund's assets normally are valued as of this time
for the purpose of computing NAV. The prices at which creations and redemptions
occur are based on the next calculation of NAV after a creation or redemption
order is received in an acceptable form under the authorized participant
agreement.
NAV
is not calculated and the fund will not process purchase and redemption requests
submitted on days when the fund is not open for business. The time at which
shares are priced and until which purchase and redemption orders are accepted
may be changed as permitted by the Securities and Exchange Commission
(SEC).
Shares
of the fund may be purchased through a broker in the secondary market by
individual investors at market prices which may vary throughout the day and may
differ from NAV.
To
the extent that the fund's assets are traded in other markets on days when the
fund is not open for business, the value of the fund's assets may be affected on
those days. In addition, trading in some of the fund's assets may not occur on
days when the fund is open for business.
Shares
of open-end funds in which the fund may invest (referred to as underlying funds)
are valued at their respective NAVs. NAV is calculated using the values of any
underlying funds in which it invests. Other assets are valued primarily on the
basis of market quotations, official closing prices, or information furnished by
a pricing service. Certain short-term securities are valued on the basis of
amortized cost. If market quotations, official closing prices, or information
furnished by a pricing service are not readily available or, in the Adviser's
opinion, are deemed unreliable for a security, then that security will be fair
valued in good faith by the Adviser in accordance with applicable fair value
pricing policies. For example, if, in the Adviser's opinion, a security's value
has been materially affected by events occurring before a fund's pricing time
but after the close of the exchange or market on which the security is
principally traded, then that security will be fair valued in good faith by the
Adviser in accordance with applicable fair value pricing policies. Fair value
pricing will be used for high yield debt securities when available pricing
information is determined to be stale or for other reasons not to accurately
reflect fair value.
Fair
value pricing is based on subjective judgments and it is possible that the fair
value of a security may differ materially from the value that would be realized
if the security were sold.
Shareholder
Information
Additional
Information about the Purchase and Sale of Shares
As
used in this prospectus, the term "shares" generally refers to the shares
offered through this prospectus.
General
Information
Information
on Fidelity
Fidelity
Investments was established in 1946 to manage one of America's first mutual
funds. Today, Fidelity is one of the world's largest providers of financial
services.
In
addition to its fund business, the company operates one of America's leading
brokerage firms, Fidelity Brokerage Services LLC. Fidelity is also a leader in
providing tax-advantaged retirement plans for individuals investing on their own
or through their employer.
The
Depository Trust Company (DTC) is a limited trust company and securities
depository that facilitates the clearance and settlement of trades for its
participating banks and broker-dealers. DTC has executed an agreement with FDC,
the fund's distributor.
Buying
and Selling Shares in the Secondary Market
Shares
of the fund are listed and traded on an exchange, and individual fund shares may
only be bought and sold in the secondary market through a broker. The fund does
not impose any minimum investment for shares of the fund purchased on an
exchange. These transactions are made at market prices that may vary throughout
the day and may be greater than the fund's NAV (premium) or less than the
fund's NAV (discount). As a result, you may pay more than NAV when you purchase
shares, and receive less than NAV when you sell shares, in the secondary market.
If you buy or sell shares in the secondary market, you will generally incur
customary brokerage commissions and charges. Due to such commissions and
charges, frequent trading may detract significantly from investment
returns.
The
fund is designed to offer investors an investment that can be bought and sold
frequently in the secondary market without impact on the fund, and such trading
activity is critical to ensuring that the market price of fund shares remains at
or close to NAV. Accordingly, the Board of Trustees has not adopted policies and
procedures designed to discourage excessive or short-term trading by these
investors.
Shares
can be purchased and redeemed directly from the fund at NAV only by Authorized
Participants in large increments called "Creation Units." The fund
accommodates frequent purchases and redemptions of Creation Units by Authorized
Participants and does not place a limit on purchases or redemptions of Creation
Units by these investors. The fund reserves the right, but does not have the
obligation, to reject any purchase or redemption transaction at any time. In
addition, the fund reserves the right to impose restrictions on disruptive,
excessive, or short-term trading.
Precautionary
Notes
- Note
to Investment Companies. For
purposes of the Investment Company Act of 1940 (1940 Act), shares are issued
by the fund, and the acquisition of shares by investment companies is subject
to the restrictions of Section 12(d)(1) of the 1940 Act. Registered investment
companies are permitted to invest in a fund beyond the limits set forth in
Section 12(d)(1), subject to certain terms and conditions, including that such
investment companies enter into an agreement with the fund.
- Note
to Authorized Participants Regarding Continuous Offering. Certain
legal risks may exist that are unique to Authorized Participants purchasing
Creation Units directly from the fund. Because new Creation Units may be
issued on an ongoing basis, at any point a "distribution," as such term is
used in the Securities Act of 1933 (the Securities Act), could be occurring.
As a broker-dealer, certain activities that you perform may, depending on the
circumstances, result in your being deemed a participant in a distribution, in
a manner which could render you a statutory underwriter and subject you to the
prospectus delivery and liability provisions of the Securities Act.
For
example, you may be deemed a statutory underwriter if you purchase Creation
Units from the fund, break them down into individual fund shares, and sell such
shares directly to customers, or if you choose to couple the creation of a
supply of new fund shares with an active selling effort involving solicitation
of secondary market demand for fund shares. A determination of whether a person
is an underwriter for purposes of the Securities Act depends upon all of the
facts and circumstances pertaining to that person's activities, and the examples
mentioned here should not be considered a complete description of all the
activities that could lead to a categorization as an underwriter.
Dealers
who are not "underwriters" but are participating in a distribution (as opposed
to engaging in ordinary secondary market transactions), and thus dealing with
shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C)
of the Securities Act, will be unable to take advantage of the prospectus
delivery exemption provided by Section 4(a)(3) of the Securities Act.
This
is because the prospectus delivery exemption in Section 4(a)(3) of the
Securities Act is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, you should note that dealers who are
not underwriters but are participating in a distribution (as opposed to engaging
in ordinary secondary market transactions) and thus dealing with the shares that
are part of an overallotment within the meaning of Section 4(a)(3)(A) of the
Securities Act would be unable to take advantage of the prospectus delivery
exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a
prospectus-delivery obligation with respect to shares of the fund are reminded
that, under Rule 153 under the Securities Act, a prospectus delivery obligation
under Section 5(b)(2) of the Securities Act owed to an exchange member in
connection with a sale on an exchange is satisfied by the fact that the
prospectus is available at the exchange upon request. The prospectus delivery
mechanism provided in Rule 153 is only available with respect to transactions on
an exchange. Certain affiliates of the fund may purchase and resell fund shares
pursuant to this prospectus.
- Note
to Secondary Market Investors.
DTC, or its nominee, is the registered owner of all outstanding shares of the
fund. The Adviser will not have any record of your ownership. Your ownership
of shares will be shown on the records of DTC and the DTC participant broker
through which you hold the shares. Your broker will provide you with account
statements, confirmations of your purchases and sales, and tax information.
Your broker will also be responsible for distributing income and capital gain
distributions and for sending you shareholder reports and other information as
may be required.
Costs
Associated with Creations and Redemptions
The
fund may impose a creation transaction fee and a redemption transaction fee to
offset transfer and other transaction costs associated with the issuance and
redemption of Creation Units of shares. Information about the procedures
regarding creation and redemption of Creation Units and the applicable
transaction fees is included in the Statement of Additional Information
(SAI).
Dividends
and Capital Gain Distributions
The
fund earns interest, dividends, and other income from its investments, and
distributes this income (less expenses) to shareholders as dividends. The fund
also realizes capital gains from its investments, and distributes these gains
(less any losses) as capital gain distributions. If you purchased your shares in
the secondary market, your broker is responsible for distributing the income and
capital gain distributions to you.
The
fund normally declares dividends and pays capital gain distributions per the
tables below:
Fund
Name |
Dividends
Paid |
Fidelity®
Low Duration Bond Factor ETF |
January,
February, March, April, May, June, July, August, September, October,
November, December |
Fund
Name |
Capital
Gains Paid |
Fidelity®
Low Duration Bond Factor ETF |
December
|
As
with any investment, your investment in the fund could have tax consequences for
you (for non-retirement accounts).
Taxes
on Distributions
Distributions
investors receive are subject to federal income tax, and may also be subject to
state or local taxes.
For
federal tax purposes, certain distributions, including dividends and
distributions of short-term capital gains, are taxable to investors as ordinary
income, while certain distributions, including distributions of long-term
capital gains, are taxable to investors generally as capital gains. A percentage
of certain distributions of dividends may qualify for taxation at long-term
capital gains rates (provided certain holding period requirements are met).
Because the fund's income is primarily derived from interest, dividends from the
fund generally will not qualify for the long-term capital gains tax rates
available to individuals.
The
fund may effect creations and redemptions using cash rather than in-kind
securities and may recognize more capital gains and be less tax-efficient than
if in-kind securities were used. When the fund effects its redemptions
with cash rather than with in-kind securities, the fund may be required to sell
portfolio securities in order to obtain the cash needed to distribute redemption
proceeds, which involves transaction costs and may cause the fund to recognize
gains that might not have been otherwise recognized or to recognize such gains
sooner than otherwise. Losses from sales of immediately reacquired securities
are subject to deferral, potentially indefinitely. The fund generally intends to
distribute net annual gains, if any, to shareholders to comply with applicable
tax rules, causing shareholders to be subject to tax on gains they would not
otherwise be subject to or at an earlier date then if the fund effected
redemptions in-kind.
If
investors buy shares when a fund has realized but not yet distributed income or
capital gains, they will be "buying a dividend" by paying the full price for the
shares and then receiving a portion of the price back in the form of a taxable
distribution.
Any
taxable distributions investors receive will normally be taxable to them when
they receive them.
Taxes
on Transactions
Purchases
and sales of shares, as well as purchases and redemptions of Creation Units, may
result in a capital gain or loss for federal tax purposes.
Fund
Services
Adviser
FMR.
The
Adviser is the fund's manager. The address of the Adviser is 245 Summer Street,
Boston, Massachusetts 02210.
As
of December 31, 2021, the Adviser had approximately $3.6 trillion in
discretionary assets under management, and approximately $4.5 trillion when
combined with all of its affiliates' assets under management.
As
the manager, the Adviser has overall responsibility for directing the fund's
investments and handling its business affairs.
Sub-Adviser(s)
FMR
Investment Management (UK) Limited (FMR UK) ,
at 1 St. Martin's Le Grand, London, EC1A 4AS, United Kingdom, serves as a
sub-adviser for the fund. As of December 31, 2021, FMR UK had approximately
$30.9 billion in discretionary assets under management. FMR UK is an affiliate
of the Adviser.
FMR
UK may provide investment research and advice on issuers based outside the
United States and may also provide investment advisory services for the
fund.
Fidelity
Management & Research (Hong Kong) Limited (FMR H.K.) ,
at Floor 19, 41 Connaught Road Central, Hong Kong, serves as a sub-adviser for
the fund. As of December 31, 2021, FMR H.K. had approximately $19.0 billion in
discretionary assets under management. FMR H.K. is an affiliate of the
Adviser.
FMR
H.K. may provide investment research and advice on issuers based outside the
United States and may also provide investment advisory services for the
fund.
Fidelity
Management & Research (Japan) Limited (FMR Japan) ,
at Kamiyacho Prime Place, 1-17, Toranomon-4-Chome, Minato-ku, Tokyo, Japan,
serves as a sub-adviser for the fund. As of March 31, 2022, FMR Japan had
approximately $6.9 billion in discretionary assets under management. FMR Japan
is an affiliate of the Adviser.
FMR
Japan may provide investment research and advice on issuers based outside the
United States and may also provide investment advisory services for the
fund.
Portfolio
Manager(s)
Brandon
Bettencourt is Co-Portfolio Manager of Fidelity ®
Low
Duration Bond Factor ETF, which he has managed since 2018. He also manages other
funds. Since joining Fidelity Investments in 2008, Mr. Bettencourt has worked as
a research associate, portfolio analyst, and portfolio manager.
Richard
Munclinger is Co-Portfolio Manager of Fidelity ®
Low
Duration Bond Factor ETF, which he has managed since 2020. He also manages other
funds. Since joining Fidelity Investments in 2016, Mr. Munclinger has
worked as a quantitative analyst and portfolio manager.
The
SAI provides additional information about the compensation of, any other
accounts managed by, and any fund shares held by the portfolio
manager(s).
From
time to time a manager, analyst, or other Fidelity employee may express views
regarding a particular company, security, industry, or market sector. The views
expressed by any such person are the views of only that individual as of the
time expressed and do not necessarily represent the views of Fidelity or any
other person in the Fidelity organization. Any such views are subject to change
at any time based upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on as
investment advice and, because investment decisions for a fund are based on
numerous factors, may not be relied on as an indication of trading intent on
behalf of any fund.
Advisory
Fee(s)
The
fund pays a management fee to the Adviser.
The
management fee is calculated and paid to the Adviser every month.
The
Adviser pays all of the other expenses of Fidelity® Low Duration Bond Factor ETF
with limited exceptions.
The
annual management fee rate, as a percentage of the fund's average net assets, is
shown in the following table:
Fund
|
Management
Fee Rate |
Fidelity®
Low Duration Bond Factor ETF |
0.15%
|
The
Adviser pays FMR Investment Management (UK) Limited, Fidelity Management &
Research (Hong Kong) Limited, and Fidelity Management & Research (Japan)
Limited for providing sub-advisory services.
The
basis for the Board of Trustees approving the management contract and
sub-advisory agreements for the fund is available in the fund's semi-annual
report for the fiscal period ended February 28, 2022.
From
time to time, the Adviser or its affiliates may agree to reimburse or waive
certain fund expenses while retaining the ability to be repaid if expenses fall
below the specified limit prior to the end of the fiscal year.
Reimbursement
or waiver arrangements can decrease expenses and boost performance.
FDC
distributes the fund's shares.
Intermediaries
may receive from the Adviser, FDC, and/or their affiliates compensation for
providing recordkeeping and administrative services, as well as other retirement
plan expenses, and compensation for services intended to result in the sale of
fund shares.
These
payments are described in more detail in this section and in the SAI.
Distribution
and Service Plan(s)
While
the fund will not make direct payments for distribution or shareholder support
services, the fund has adopted a Distribution and Service Plan pursuant to
Rule 12b-1 under the 1940 Act with respect to its shares. The Plan
recognizes that the Adviser may use its management fee revenues, as well as its
past profits or its resources from any other source, to pay FDC for
expenses incurred in connection with providing services intended to result in
the sale of shares of the fund and/or shareholder support services. The
Adviser, directly or through FDC, may pay significant amounts to intermediaries
that provide those services. Currently, the Board of Trustees of the fund
has authorized such payments for shares of the fund.
If
payments made by the Adviser to FDC or to intermediaries under the Distribution
and Service Plan were considered to be paid out of the fund's assets on an
ongoing basis, they might increase the cost of your investment and might cost
you more than paying other types of sales charges.
No
dealer, sales representative, or any other person has been authorized to give
any information or to make any representations, other than those contained in
this prospectus and in the related SAI, in connection with the offer contained
in this prospectus. If given or made, such other information or representations
must not be relied upon as having been authorized by the fund or FDC. This
prospectus and the related SAI do not constitute an offer by the fund or by FDC
to sell shares of the fund to, or to buy shares of the fund from, any person to
whom it is unlawful to make such offer.
State
Street Bank and Trust Company serves as the fund's transfer agent and custodian,
and is located at One Heritage Drive, Floor 1, North Quincy, Massachusetts,
02171 and 1 Lincoln Street, Boston, Massachusetts, 02111,
respectively.
Appendix
Financial
Highlights are intended to help you understand the financial history of fund
shares for the past 5 years (or, if shorter, the period of operations). Certain
information reflects financial results for a single share. The total returns in
the table represent the rate that an investor would have earned (or lost) on an
investment in shares (assuming reinvestment of all dividends and distributions).
The annual information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report(s), along with
fund financial statements, is included in the annual report. Annual reports are
available for free upon request.
Fidelity
Low Duration Bond Factor ETF |
|
Year
ended
August
31, 2022 |
Year
ended
August
31, 2021 |
Year
ended
August
31, 2020 |
Year
ended
August
31, 2019 |
Year
ended
August
31, 2018 A
|
Selected
Per-Share Data |
|
|
|
|
|
Net
asset value, beginning of period |
$
50.91
|
$
50.99
|
$
50.71
|
$
50.10
|
$
50.00
|
Income
from Investment Operations |
|
|
|
|
|
Net
investment income (loss) B,C
|
0.495
|
0.275
|
0.913
|
1.479
|
0.279
|
Net
realized and unrealized gain (loss) |
(1.278)
|
(0.085)
|
0.325
|
0.469
|
0.096
|
Total
from investment operations |
(0.783)
|
0.190
|
1.238
|
1.948
|
0.375
|
Distributions
from net investment income |
(0.487)
|
(0.270)
|
(0.958)
|
(1.338)
|
(0.275)
|
Total
distributions |
(0.487)
|
(0.270)
|
(0.958)
|
(1.338)
|
(0.275)
|
Net
asset value, end of period |
$
49.64
|
$
50.91
|
$
50.99
|
$
50.71
|
$
50.10
|
Total
Return D,E,F
|
(1.53)%
|
0.36%
|
2.48%
|
3.95%
|
0.75%
|
Ratios
to Average Net Assets B,G,H
|
|
|
|
|
|
Expenses
before reductions |
.15%
|
.15%
|
.15%
|
.15%
|
.15%
I
|
Expenses
net of fee waivers, if any |
.15%
|
.15%
|
.15%
|
.15%
|
.15%
I
|
Expenses
net of all reductions |
.15%
|
.15%
|
.15%
|
.15%
|
.15%
I
|
Net
investment income (loss) |
.99%
|
.54%
|
1.81%
|
2.90%
|
2.51%
I
|
Supplemental
Data |
|
|
|
|
|
Net
assets, end of period (000 omitted) |
$207,252
|
$235,442
|
$191,216
|
$109,024
|
$10,020
|
Portfolio
turnover rate J
|
45%
|
40%
|
43%
K
|
14%
|
2%
L
|
A
For
the period June 12, 2018 (commencement of operations) through August 31,
2018.
B
Net
investment income (loss) is affected by the timing of the declaration of
dividends by any underlying mutual funds or exchange-traded funds (ETFs). Net
investment income (loss) of any such underlying funds is not included in the
Fund's net investment income (loss) ratio.
C
Calculated
based on average shares outstanding during the period.
D
Based
on net asset value.
E
Total
returns for periods of less than one year are not annualized.
F
Total
returns would have been lower if certain expenses had not been reduced during
the applicable periods shown.
G
Expense
ratios reflect operating expenses of the class. Expenses before reductions do
not reflect amounts reimbursed, waived, or reduced through arrangements with the
investment advisor, brokerage services, or other offset arrangements, if
applicable, and do not represent the amount paid by the class during periods
when reimbursements, waivers or reductions occur.
H
Fees
and expenses of any underlying mutual funds or exchange-traded funds (ETFs) are
not included in the Fund's expense ratio. The Fund indirectly bears its
proportionate share of these expenses. For additional expense information
related to investments in Fidelity Central Funds, please refer to the
"Investments in Fidelity Central Funds" note found in the Notes to Financial
Statements section of the most recent Annual or Semi-Annual report.
I
Annualized.
J
Amount
does not include the portfolio activity of any underlying mutual funds or
exchange-traded funds (ETFs).
K
Portfolio
turnover rate excludes securities received or delivered in-kind.
L
Amount
not annualized.
Additional
Index Information
Bloomberg
US Treasury Bill: 6-9 Months Index is
a market value-weighted index of investment-grade fixed-rate public obligations
of the U.S. Treasury with maturities between six and nine months.
The
Fidelity
Low Duration Investment Grade Factor Index SM
is
designed to optimize the balance of interest rate risk and credit risk such that
both returns and risk measures may be improved relative to traditional U.S.
investment grade floating rate note indices.
The
Fidelity index or indices listed above were created by FPS using a rules-based
proprietary index methodology described for the applicable fund(s) in the "Fund
Basics - Investment Details" section of this prospectus.
A
fund is entitled to use its index pursuant to a licensing arrangement with
FPS.
The
fund(s) and the Adviser have each adopted policies and procedures designed to
minimize potential conflicts of interest in connection with the management of
the fund(s).
Additional
information regarding the index or indices is available on
i.fidelity.com/indices.
The
index or indices are the property of FPS, which has contracted with Bloomberg
Finance L.P. and its affiliates, including Bloomberg Index Services Limited
(collectively, "Bloomberg") to calculate and maintain the index or indices. The
index or indices are not sponsored by Bloomberg. Bloomberg will not be liable
for any errors or omissions in calculating the index or indices.
"Bloomberg ®
"
is a service mark of Bloomberg Finance L.P. and its affiliates, including
Bloomberg Index Services Limited ("BISL"), and has been licensed for use for
certain purposes by FPS.
BLOOMBERG
is a trademark and service mark of Bloomberg Finance L.P. or its affiliates.
Bloomberg Finance L.P. and its affiliates (collectively, "Bloomberg") are not
affiliated with FPS ("Client"). Bloomberg's association with Client is to act as
the calculation agent of The Fidelity Low Duration Investment Grade Factor
Index SM
,
which is the property of Client. Bloomberg does not guarantee the timeliness,
accuracy, or completeness of any data or information relating to the Index.
Bloomberg makes no warranty, express or implied, as to the Index, any data or
values relating thereto or any financial product or instrument linked to, using
as a component thereof or based on the Index ("Products") or results to be
obtained therefrom, and expressly disclaims all warranties of merchantability
and fitness for a particular purpose with respect thereto. To the maximum extent
allowed by law, Bloomberg, its licensors, and its and their respective
employees, contractors, agents, suppliers, and vendors shall have no liability
or responsibility whatsoever for any injury or damages-whether direct, indirect,
consequential, incidental, punitive, or otherwise-arising in connection with the
Index, any data or values relating thereto or any Products-whether arising from
their negligence or otherwise.
FPS
is the index provider. FPS is an affiliated person of the investment adviser for
the fund(s) and as such is an affiliated index provider. FPS makes no
representation or warranty, express or implied, to the owners of shares of the
fund(s) or any member of the public regarding the advisability of investing in
securities generally or in the fund(s) particularly or the ability of the
fund(s) to track the index or indices or of the ability of the index or indices
to operate as designed. FPS has no obligation to take the needs of the fund(s)
or the owners of shares of the fund(s) into consideration in determining,
composing, or calculating the index or indices. FPS does not make any express or
implied warranties, and expressly disclaims all warranties of merchantability or
fitness for a particular purpose or use with respect to the index or indices or
any data included therein. FPS does not guarantee the accuracy, completeness, or
performance of any index or the data included therein and shall have no
liability in connection with any index or index calculation, errors, omissions
or interruptions of any Fidelity index or any data included therein. FPS has
contracted with an independent calculation agent to calculate the index or
indices. Without limiting any of the foregoing, in no event shall FPS have any
liability for any special, punitive, direct, indirect or consequential damages
(including lost profits) arising out of matters relating to the use of the index
or indices, even if notified of the possibility of such damages.
You
can obtain additional information about the fund. A description of the fund's
policies and procedures for disclosing its holdings is available in its
Statement of Additional Information (SAI) and on Fidelity's web sites. The SAI
also includes more detailed information about the fund and its investments. The
SAI
is
incorporated herein by reference (legally forms a part of the prospectus). The
fund's annual and semi-annual reports also include additional information. The
fund's annual report includes a discussion of the fund's holdings and recent
market conditions and the fund's investment strategies that affected
performance.
For
a free copy of any of these documents or to request other information or ask
questions about the fund, call Fidelity at 1-800-FIDELITY. In addition, you may
visit Fidelity's web site at www.fidelity.com for a free copy of a prospectus,
SAI, or annual or semi-annual report or to request other information.
The
SAI, the fund's annual and semi-annual reports and other related materials
are available from the Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) Database on the SEC's web site (http://www.sec.gov). You can
obtain copies of this information, after paying a duplicating fee, by
sending a request by e-mail to [email protected] or by writing the Public
Reference Section of the SEC, Washington, D.C. 20549-1520. You can also
review and copy information about the fund, including the fund's SAI, at
the SEC's Public Reference Room in Washington, D.C. Call 1-202-551-8090
for information on the operation of the SEC's Public Reference
Room. |
Investment
Company Act of 1940, File Number(s), 811-22796
|
Fidelity
Distributors Company LLC (FDC) is a member of the Securities Investor Protection
Corporation (SIPC). You may obtain information about SIPC, including the SIPC
brochure, by visiting www.sipc.org or calling SIPC at 202-371-8300.
Fidelity,
the Fidelity Investments Logo and all other Fidelity trademarks or service marks
used herein are trademarks or service marks of FMR LLC. Any third-party marks
that are used herein are trademarks or service marks of their respective owners.
© 2022 FMR LLC. All rights reserved.
1.9887640.106
|
LDE-PRO-1222
|