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Have you been searching for a Government Mortgage - Intermediate fund? You might want to begin with Fidelity GNMA Fund (FGMNX - Free Report) . FGMNX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FGMNX is one of many Government Mortgage - Intermediate funds to choose from. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market. This market takes mortgages, packages them together, and sells off the pooled securities to investors. This particular category focuses on MBS that usually have at least three years to maturity, but less than 10, giving a medium risk and yield profile to funds here.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FGMNX. The Fidelity GNMA Fund made its debut in November of 1985 and FGMNX has managed to accumulate roughly $4.09 billion in assets, as of the most recently available information. Franco Castagliuolo is the fund's current manager and has held that role since December of 2009.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 2.26%, 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 1.44%, 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. The standard deviation of FGMNX over the past three years is 2.06% compared to the category average of 2.62%. Over the past 5 years, the standard deviation of the fund is 1.96% compared to the category average of 2.51%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. FGMNX has a modified duration of 4.78, which suggests that the fund will decline 4.78% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 3.67% means that a $10,000 investment should result in a yearly payout of $367.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk 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. With a beta of 0.65, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FGMNX has a positive alpha of 0.27, which measures performance on a risk-adjusted basis.
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, FGMNX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.84%. FGMNX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity GNMA Fund ( FGMNX ) has a neutral Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on Government Mortgage - Intermediate 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 FGMNX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is FGMNX a Strong Bond Fund Right Now?
Have you been searching for a Government Mortgage - Intermediate fund? You might want to begin with Fidelity GNMA Fund (FGMNX - Free Report) . FGMNX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FGMNX is one of many Government Mortgage - Intermediate funds to choose from. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market. This market takes mortgages, packages them together, and sells off the pooled securities to investors. This particular category focuses on MBS that usually have at least three years to maturity, but less than 10, giving a medium risk and yield profile to funds here.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FGMNX. The Fidelity GNMA Fund made its debut in November of 1985 and FGMNX has managed to accumulate roughly $4.09 billion in assets, as of the most recently available information. Franco Castagliuolo is the fund's current manager and has held that role since December of 2009.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 2.26%, 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 1.44%, 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. The standard deviation of FGMNX over the past three years is 2.06% compared to the category average of 2.62%. Over the past 5 years, the standard deviation of the fund is 1.96% compared to the category average of 2.51%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. FGMNX has a modified duration of 4.78, which suggests that the fund will decline 4.78% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 3.67% means that a $10,000 investment should result in a yearly payout of $367.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk 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. With a beta of 0.65, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FGMNX has a positive alpha of 0.27, which measures performance on a risk-adjusted basis.
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, FGMNX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.84%. FGMNX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity GNMA Fund ( FGMNX ) has a neutral Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on Government Mortgage - Intermediate 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 FGMNX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.