Fidelity VIP Investment Grade Bond
Objective And StrategyObjective
High a level of current income as is consistent with the preservation of capital.
StrategyNormally investing at least 80% of assets in investment-grade debt securities (those of medium and high quality) of all types and repurchase agreements for those securities. Managing the fund to have similar overall interest rate risk to the Barclays Capital U.S. Aggregate Bond Index. Allocating assets across different market sectors and maturities. Investing in domestic and foreign issuers. Analyzing the credit quality of the issuer, security-specific features, current and potential future valuation, and trading opportunities to select investments. Potentially investing in lower-quality debt securities. Engaging in transactions that have a leveraging effect on the fund, including derivatives. Investing in Fidelity's central funds (specialized investment vehicles used by Fidelity funds to invest in particular security types or investment disciplines).
Tax Inefficient Fund
Asset classes that make large ordinary income distributions or generate significant short term capital gains are tax inefficient. Asset classes that match this description include REITs, commodities funds and absolute return funds.