Investigating Potential Claims: Fidelity Series 5+ Year Inflation-Protected Bond Index (FSTDX)  

Have you suffered investment losses in Fidelity Series 5+ Year Inflation-Protected Bond Index (FSTDX) at the recommendation of your financial advisor? If so, the securities attorneys at the White Law Group may be able to help you. 

Fidelity Series 5+ Year Inflation-Protected Bond Index (FSTDX) seeks to provide investment results that correspond to the total return of the inflation-protected sector of the United States Treasury market. 

According to Morningstar, Fidelity Series 5+ Year Inflation-Protected Bond Index (FSTDX) is currently down –21.12% YTD. 

As you may have heard, the Federal Reserve raised interest rates by 0.5% on May 4, 2022 to 0.75% to 1.00%, and increased it again in September 2022 to 3% to 3.25%. More increases are anticipated in the months ahead.    

The longer the maturity of a particular bond or group of bonds, the greater impact changing interest rates will have. Unfortunately for investors, since FSTDX invests in long-duration bonds, it is exposed to credit risk associated with an increase in interest rates.  

Investigating Potential Claims 

The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended bond funds like FSTDX to investors.  

Before recommending a bond investment, a financial advisor, at minimum, is required to disclose: (1) the bond’s current price, (2) the commissions or markups that must be paid to acquire the bond, (3) an explanation of the call provisions for the bond (if applicable), (4) the current yield, the yield to maturity, and the yield to call the bond, (5) the amount and timing of the bond payments, and, most importantly, (6) the risk of default or devaluation of that particular bond’s value.  

If a financial advisor failed to disclose this potential risk of investing in bonds, and instead represented that investing in bonds is “safe,” then the investor may have a claim for failure to adequately disclose the true risks of investing in bonds at historically low yields.  This risk is magnified if the maturity of the bond is longer.  The longer the maturity of a particular bond or group of bonds, the greater impact changing interest rates will have.  So, if a financial advisor recommends to a client in a historically low yield environment, to over-concentrate their portfolio in long term bonds, the risk of loss is substantially greater than if the broker recommended short term bonds. 

If you have suffered investment losses in Fidelity Series 5+ Year Inflation-Protected Bond Index (FSTDX), the securities attorneys at the White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment. 

For a free consultation with one of our securities fraud attorneys please call The White Law Group at 888-637-5510. 

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. 

For more information on The White Law Group, and its representation of investors, please visit www.WhiteSecuritiesLaw.com.