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Any investors hoping to find a Diversified Bonds fund could think about starting with Fidelity Total Bond (FTBFX). FTBFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify FTBFX in the Diversified Bonds category, an area that is rife with potential choices. Diversified Bonds funds offer exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. Generally speaking, bond funds here will have sizable exposure to government debt, as well as modest holdings in the corporate bond market too.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FTBFX. Fidelity Total Bond debuted in October of 2002. Since then, FTBFX has accumulated assets of about $14.52 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. FTBFX has a 5-year annualized total return of 1.07% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -2.06%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 7.24%, compared to the category average of 13.14%. Looking at the past 5 years, the fund's standard deviation is 6.4% compared to the category average of 13.77%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.84, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FTBFX has a positive alpha of 1.3, 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 61.96% in high quality bonds rated at least 'AA' or higher, while 26.09% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.