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Have you been searching for a Muni - Bonds fund? You might want to begin with Fidelity Intermediate Municipals Income (FLTMX - Free Report) . FLTMX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FLTMX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
FLTMX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Intermediate Municipals Income made its debut in April of 1977, FLTMX has garnered more than $4.55 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. FLTMX has a 5-year annualized total return of 2.87% and it sits 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 4.19%, which places it in the middle 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. FLTMX's standard deviation over the past three years is 2.13% compared to the category average of 4.68%. The standard deviation of the fund over the past 5 years is 2.57% compared to the category average of -3.21%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. FLTMX has a modified duration of 4.83, which suggests that the fund will decline 4.83% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 4.79% means that a $10,000 investment should result in a yearly payout of $479.
While a higher coupon is good for when you want a strong level of current income, it could present a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. FLTMX carries a beta of 0.62, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.28, 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, FLTMX is a no load fund. It has an expense ratio of 0.36% compared to the category average of 0.69%. So, FLTMX 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.
Bottom Line
Overall, Fidelity Intermediate Municipals Income ( FLTMX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Fidelity Intermediate Municipals Income ( FLTMX ) looks like a somewhat average choice for investors right now.
Your research on the Muni - Bonds 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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Is FLTMX a Strong Bond Fund Right Now?
Have you been searching for a Muni - Bonds fund? You might want to begin with Fidelity Intermediate Municipals Income (FLTMX - Free Report) . FLTMX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FLTMX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
FLTMX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Intermediate Municipals Income made its debut in April of 1977, FLTMX has garnered more than $4.55 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. FLTMX has a 5-year annualized total return of 2.87% and it sits 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 4.19%, which places it in the middle 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. FLTMX's standard deviation over the past three years is 2.13% compared to the category average of 4.68%. The standard deviation of the fund over the past 5 years is 2.57% compared to the category average of -3.21%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. FLTMX has a modified duration of 4.83, which suggests that the fund will decline 4.83% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 4.79% means that a $10,000 investment should result in a yearly payout of $479.
While a higher coupon is good for when you want a strong level of current income, it could present a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. FLTMX carries a beta of 0.62, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.28, 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, FLTMX is a no load fund. It has an expense ratio of 0.36% compared to the category average of 0.69%. So, FLTMX 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.
Bottom Line
Overall, Fidelity Intermediate Municipals Income ( FLTMX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Fidelity Intermediate Municipals Income ( FLTMX ) looks like a somewhat average choice for investors right now.
Your research on the Muni - Bonds 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.