Is FSHBX a Strong Bond Fund Right Now?
There are plenty of choices in the Investment Grade Bond - Short category, but where should you start your research? Well, one fund that may not be worth investigating is Fidelity Short-Term Bond (FSHBX). FSHBX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
FSHBX is classified in the Investment Grade Bond - Short segment by Zacks, an area full of investment potential. By investing in bonds that mature in less than two years, Investment Grade Bond - Short funds are focused on the short end of the curve. Fixed income instruments at this maturity level tend to have low duration risk, but they also pay out small yields compared to their longer-dated peers. Furthermore, these funds'focus on investment grade make them safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSHBX. Fidelity Short-Term Bond made its debut in September of 1986, and since then, FSHBX has accumulated about $1.81 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. FSHBX has a 5-year annualized total return of 2.04% and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 3.95%, which places it in the middle third during this time-frame.
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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. FSHBX's standard deviation over the past three years is 2.09% compared to the category average of 11.93%. Over the past 5 years, the standard deviation of the fund is 1.88% compared to the category average of 11.64%. This makes the fund less volatile than its peers over the past half-decade.
FSHBX carries a beta of 0.28, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.22, 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, FSHBX is a no load fund. It has an expense ratio of 0.30% compared to the category average of 0.89%. FSHBX is actually cheaper than its peers when you consider factors like cost.