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Looking for a Government Mortgage - Intermediate fund? You may want to consider Fidelity GNMA Fund (FGMNX - Free Report) as a possible option. FGMNX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FGMNX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS'that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.
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 $4.76 billion in assets, as of the most recently available information. The fund is currently managed by Franco Castagliuolo who has been in charge of the fund since December of 2009.
Performance
Investors naturally seek funds with strong performance. FGMNX has a 5-year annualized total return of 1.52% 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 0.92%, 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 1.73% compared to the category average of 2.26%. Over the past 5 years, the standard deviation of the fund is 2.45% compared to the category average of 2.63%. 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 3.42, which suggests that the fund will decline 3.42% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 3.63% means that a $10,000 investment should result in a yearly payout of $363.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk 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. FGMNX carries a beta of 0.55, 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 -0.04, 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, FGMNX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.65%. So, FGMNX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity GNMA Fund has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Want even more information about FGMNX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is FGMNX a Strong Bond Fund Right Now?
Looking for a Government Mortgage - Intermediate fund? You may want to consider Fidelity GNMA Fund (FGMNX - Free Report) as a possible option. FGMNX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FGMNX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS'that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.
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 $4.76 billion in assets, as of the most recently available information. The fund is currently managed by Franco Castagliuolo who has been in charge of the fund since December of 2009.
Performance
Investors naturally seek funds with strong performance. FGMNX has a 5-year annualized total return of 1.52% 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 0.92%, 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 1.73% compared to the category average of 2.26%. Over the past 5 years, the standard deviation of the fund is 2.45% compared to the category average of 2.63%. 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 3.42, which suggests that the fund will decline 3.42% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 3.63% means that a $10,000 investment should result in a yearly payout of $363.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk 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. FGMNX carries a beta of 0.55, 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 -0.04, 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, FGMNX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.65%. So, FGMNX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity GNMA Fund has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Want even more information about FGMNX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.