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Any investors hoping to find a High Yield - Bonds fund could think about starting with Fidelity Advisor High Income Advantage M (FAHYX - Free Report) . FAHYX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FAHYX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
Fidelity is responsible for FAHYX, and the company is based out of Boston, MA. The Fidelity Advisor High Income Advantage M made its debut in January of 1987 and FAHYX has managed to accumulate roughly $1.45 billion in assets, as of the most recently available information. The fund's current manager, Harley Lank, has been in charge of the fund since September of 2009.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.01%, and is 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 5.43%, 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, FAHYX's standard deviation comes in at 6.42%, compared to the category average of 7.75%. The fund's standard deviation over the past 5 years is 5.95% compared to the category average of 7.61%. This makes the fund less volatile than its peers over the past half-decade.
Income
We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 7.22% means that a $10,000 investment should result in a yearly payout of $722.
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.
Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks. With a beta of 0.28, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FAHYX has a positive alpha of 5.05, which measures performance on a risk-adjusted basis.
However, it is worth noting that 25 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
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, FAHYX is a load fund. It has an expense ratio of 1.01% compared to the category average of 1.04%. From a cost perspective, FAHYX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Advisor High Income Advantage M has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Advisor High Income Advantage M looks like a good potential choice for investors right now.
Don't stop here for your research on High Yield - 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 FAHYX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is FAHYX a Strong Bond Fund Right Now?
Any investors hoping to find a High Yield - Bonds fund could think about starting with Fidelity Advisor High Income Advantage M (FAHYX - Free Report) . FAHYX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FAHYX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
Fidelity is responsible for FAHYX, and the company is based out of Boston, MA. The Fidelity Advisor High Income Advantage M made its debut in January of 1987 and FAHYX has managed to accumulate roughly $1.45 billion in assets, as of the most recently available information. The fund's current manager, Harley Lank, has been in charge of the fund since September of 2009.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.01%, and is 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 5.43%, 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, FAHYX's standard deviation comes in at 6.42%, compared to the category average of 7.75%. The fund's standard deviation over the past 5 years is 5.95% compared to the category average of 7.61%. This makes the fund less volatile than its peers over the past half-decade.
Income
We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 7.22% means that a $10,000 investment should result in a yearly payout of $722.
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.
Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks. With a beta of 0.28, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FAHYX has a positive alpha of 5.05, which measures performance on a risk-adjusted basis.
However, it is worth noting that 25 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
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, FAHYX is a load fund. It has an expense ratio of 1.01% compared to the category average of 1.04%. From a cost perspective, FAHYX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Advisor High Income Advantage M has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Advisor High Income Advantage M looks like a good potential choice for investors right now.
Don't stop here for your research on High Yield - 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 FAHYX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.