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Is FCONX a Strong Bond Fund Right Now?

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There are plenty of choices in the Government Mortgage - Short category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Conservative Income Bond (FCONX - Free Report) . FCONX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FCONX is part of the Government Mortgage - Short section, and this segment boasts an array of possible selections. A mortgage-backed security (MBS) is a type of asset-backed security that packages mortgages together and then sells off the pooled securities. Government Mortgage - Short funds focus on this market; this category gives funds here a lower yield but lower interest rate sensitivity, and focuses on MBS that usually have less than three years until maturity.

History of Fund/Manager

FCONX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Conservative Income Bond made its debut in March of 2011, FCONX has garnered more than $2.44 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 1.48%, and is in the top 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 1.97%, 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. Over the past three years, FCONX's standard deviation comes in at 0.98%, compared to the category average of 7.06%. Over the past 5 years, the standard deviation of the fund is 0.77% compared to the category average of 6.44%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.09, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FCONX has a positive alpha of 0.22, 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, FCONX is a no load fund. It has an expense ratio of 0.35% compared to the category average of 0.83%. FCONX 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 Conservative Income Bond ( FCONX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Fidelity Conservative Income Bond ( FCONX ) looks like a good potential choice for investors right now.

Your research on the Government Mortgage - 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. 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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