Diversified Bonds fund seekers should consider taking a look at Fidelity Total Bond (FTBFX). FTBFX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Diversified Bonds funds is an area filled with options, such as FTBFX. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. Typically, these funds have a solid amount of exposure to government debt, as well as modest holdings in the corporate bond market.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FTBFX. Since Fidelity Total Bond made its debut in October of 2002, FTBFX has garnered more than $15.91 billion in assets. The fund’s current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. FTBFX has a 5-year annualized total return of 5.1% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6%, which places it in the top third during this time-frame.
When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, FTBFX’s standard deviation comes in at 3.86%, compared to the category average of 12.19%. Looking at the past 5 years, the fund’s standard deviation is 3.55% compared to the category average of 10.85%. This makes the fund less volatile than its peers over the past half-decade.
FTBFX carries a beta of 1, meaning that the fund is volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.72, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond’s rating, which is a grade ( ‘AAA’ to ‘D’ ) given to a bond that indicates its credit quality. With this letter scale in mind, FTBFX has 61.61% in high quality bonds rated at least ‘AA’ or higher, while 28.06% are of medium quality, with ratings of ‘A’ to ‘BBB’. The fund has an average quality of AA, and focuses on high quality securities.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FTBFX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.89%. Looking at the fund from a cost perspective, FTBFX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Total Bond ( FTBFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don’t stop here for your research on Diversified Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FTBFX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (FTBFX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
