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If you've been stuck searching for International Bond - Emerging funds, you might want to consider passing on by Fidelity New Markets Income (FNMIX - Free Report) as a possibility. FNMIX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FNMIX is an International Bond - Emerging option, which is loaded with different choices. International Bond - Emerging funds focus on fixed income securities from a variety of emerging international markets. Typically, investors can expect exposure to economies like China, Brazil, India, South Africa, Indonesia, and many others. These funds are appealing because of their geographic diversification, but this can also mean that currency risk is a factor.
History of Fund/Manager
FNMIX finds itself in the Fidelity family, based out of Boston, MA. Fidelity New Markets Income debuted in May of 1993. Since then, FNMIX has accumulated assets of about $6.24 billion, according to the most recently available information. The fund's current manager, John Carlson, has been in charge of the fund since June of 1995.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FNMIX has a 5-year annualized total return of 4.46% 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 7.5%, 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, FNMIX's standard deviation comes in at 6.81%, compared to the category average of 7.45%. Over the past 5 years, the standard deviation of the fund is 7.32% compared to the category average of 7.89%. This makes the fund less volatile than its peers over the past half-decade.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 6.74% means that a $10,000 investment should result in a yearly payout of $674.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks. FNMIX carries a beta of 1.29, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 2.37, 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, FNMIX has 23% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 58.9%, giving FNMIX an average quality of BBB. This means that it focuses on medium 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, FNMIX is a no load fund. It has an expense ratio of 0.82% compared to the category average of 1.18%. So, FNMIX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity New Markets Income has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity New Markets Income looks like a somewhat weak choice for investors right now.
Your research on the International Bond - Emerging 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is FNMIX a Strong Bond Fund Right Now?
If you've been stuck searching for International Bond - Emerging funds, you might want to consider passing on by Fidelity New Markets Income (FNMIX - Free Report) as a possibility. FNMIX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FNMIX is an International Bond - Emerging option, which is loaded with different choices. International Bond - Emerging funds focus on fixed income securities from a variety of emerging international markets. Typically, investors can expect exposure to economies like China, Brazil, India, South Africa, Indonesia, and many others. These funds are appealing because of their geographic diversification, but this can also mean that currency risk is a factor.
History of Fund/Manager
FNMIX finds itself in the Fidelity family, based out of Boston, MA. Fidelity New Markets Income debuted in May of 1993. Since then, FNMIX has accumulated assets of about $6.24 billion, according to the most recently available information. The fund's current manager, John Carlson, has been in charge of the fund since June of 1995.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FNMIX has a 5-year annualized total return of 4.46% 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 7.5%, 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, FNMIX's standard deviation comes in at 6.81%, compared to the category average of 7.45%. Over the past 5 years, the standard deviation of the fund is 7.32% compared to the category average of 7.89%. This makes the fund less volatile than its peers over the past half-decade.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 6.74% means that a $10,000 investment should result in a yearly payout of $674.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks. FNMIX carries a beta of 1.29, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 2.37, 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, FNMIX has 23% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 58.9%, giving FNMIX an average quality of BBB. This means that it focuses on medium 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, FNMIX is a no load fund. It has an expense ratio of 0.82% compared to the category average of 1.18%. So, FNMIX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity New Markets Income has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity New Markets Income looks like a somewhat weak choice for investors right now.
Your research on the International Bond - Emerging 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.