There are plenty of choices in the Investment Grade Bond - Short category, but where should you start your research? Well, one fund that may not be worth investigating is Fidelity Short-Term Bond (FSHBX Quick QuoteFSHBX - Free Report) . FSHBX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

FSHBX is classified in the Investment Grade Bond - Short segment by Zacks, an area full of investment potential. By investing in bonds that mature in less than two years, Investment Grade Bond - Short funds are focused on the short end of the curve. Fixed income instruments at this maturity level tend to have low duration risk, but they also pay out small yields compared to their longer-dated peers. Furthermore, these funds'focus on investment grade make them safer, but yields will be lower than in the junk bond category.

History of Fund/Manager

FSHBX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Short-Term Bond debuted in September of 1986. Since then, FSHBX has accumulated assets of about $1.68 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 1.82%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.76%, which places it in the middle 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. The standard deviation of FSHBX over the past three years is 2.24% compared to the category average of 12.39%. The standard deviation of the fund over the past 5 years is 2.1% compared to the category average of 13.15%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.3, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FSHBX has a positive alpha of 0.16, which measures performance on a risk-adjusted basis.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FSHBX is a no load fund. It has an expense ratio of 0.30% compared to the category average of 0.89%. FSHBX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

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

Bottom Line

Overall, even with its comparatively similar performance, better downside risk, and lower fees, Fidelity Short-Term Bond ( FSHBX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.

Your research on the Investment Grade Bond - Short 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.