If investors are looking at the Government Mortgage - Intermediate fund category, Fidelity GNMA Fund (FGMNX Quick QuoteFGMNX - Free Report) could be a potential option. FGMNX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various 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

FGMNX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity GNMA Fund made its debut in November of 1985 and FGMNX has managed to accumulate roughly $2.06 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. FGMNX has a 5-year annualized total return of 0.25% 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 -1.01%, which places it in the top third during this time-frame.

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. Compared to the category average of 7.05%, the standard deviation of FGMNX over the past three years is 7.99%. The fund's standard deviation over the past 5 years is 6.26% compared to the category average of 5.76%. This makes the fund more volatile than its peers over the past half-decade.

This fund has a beta of 1.03, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, FGMNX has a negative alpha of -0.16, 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, FGMNX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.56%. So, FGMNX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity GNMA Fund ( FGMNX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

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