Yahoo Finance Is FCBFX a Strong Bond Fund Right Now?
Investment Grade Bond - Intermediate fund seekers should not consider taking a look at Fidelity Corporate Bond Fund (FCBFX) at this time. FCBFX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that FCBFX is an Investment Grade Bond - Intermediate option, which is a segment loaded with many different investment options. By targeting bonds that mature in more than three years but less than 15 years, Investment Grade Bond - Intermediate funds are a middle of the curve option. Fixed income instruments at this maturity level usually have medium duration risk, but their yields are respectable, especially in comparison to their short-maturity counterparts. Additionally, a focus on investment grade makes these funds safer, but yields tend to be lower than in the junk bond category.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FCBFX. The Fidelity Corporate Bond Fund made its debut in May of 2010 and FCBFX has managed to accumulate roughly $903.96 million in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. FCBFX has a 5-year annualized total return of 1.1% and is in the middle 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 -2.75%, which places it in the middle 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. The standard deviation of FCBFX over the past three years is 9.2% compared to the category average of 13.29%. Looking at the past 5 years, the fund's standard deviation is 8.98% compared to the category average of 14.1%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 1.02, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, FCBFX has a positive alpha of 2.14, which measures performance on a risk-adjusted basis.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FCBFX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.89%. So, FCBFX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, better downside risk, and lower fees, Fidelity Corporate Bond Fund ( FCBFX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Your research on the Investment Grade Bond - Intermediate segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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