MANAGED INCOME OPTION
Managed Income Portfolio II
Fund Code: 0633
what it is: A stable value fund (not a mutual fund). It is a commingled pool of the Fidelity Group Trust for Employee Benefit Plans and is managed by Fidelity Management Trust Company (FMTC).
goal: Seeks to preserve your principle investment while earning interest income. The fund will try to maintain a stable $1 unit price. However, the fund can not guarantee this stable unit price and its yield will fluctuate.
what it invests in: Invests in investment contracts offered by major insurance companies and other approved financial institutions and in certain types of fixed income securities. A small portion of the fund is invested in a money market fund to provide daily liquidity. Investment contracts provide for the payment of a specified rate of interest to the fund and for the repayment of principal, when the contract matures. Participant withdrawals and exchanges are paid at book value (principal and interest accrued to date) during the life of the contract.
Some investment contracts are structured solely as a general debt obligation of the issuer. Other investment contracts ("wrap contracts") are purchased in conjunction with an investment by the fund in fixed income securities, which may include U. S. Treasury bonds, corporate bonds, mortgage-backed securities and bond funds. Interest is credited to the fund under the wrap contract. There is no immediate recognition of investment gains and losses on the fixed income securities. Instead, the gain or loss is recognized over time by adjusting the interest rate credited to the fund under the wrap contract. The wrap contract also provides for the payment of participant withdrawals and exchanges at book value. All investment contracts and fixed income securities purchased for the fund must satisfy the credit quality standards of FMTC.
The investment contract and fixed income security commitments are backed solely by the financial resources of the issuer. In addition, investment contract issuers may impose a contract penalty on withdrawals or exchanges from the fund caused by an extraordinary corporate event (layoff, sale of a line of business, etc.).
*Units of the fund are not guaranteed by the manager or the Plan sponsor.
who might want to invest: Someone who wants to try for a slightly higher yield than is offered by money market funds and is willing to accept slightly more investment risk.
Someone who is looking for some price stability to balance more aggressive investment choices.
Managed Income Portfolio II is not a mutual fund; it is a commingled pool of the Fidelity Group Trust for Employee Benefit Plans and is managed by Fidelity Management Trust Company (FMTC).
