May 21, 2011

Fidelity Intermediate Municipal Income Fund (FLTMX)

Fidelity Intermediate Municipal Income Fund (FLTMX) is a top rated muni bond mutual fund. This municipal bond fund provides tax free yield for investors.

Fidelity Intermediate Municipal Income (Ticker: FLTMX)

Fidelity Intermediate Municipal Income Fund (FLTMX)The investment in Fidelity Intermediate Municipal Income is seeking for a high level of current income exempt from federal income tax consistent with capital preservation. The majority net asset is invested in investment-grade municipal securities (at least 80% asset). The interest of these securities is exempt from federal income tax.

This fund maintains a dollar-weighted average maturity between 3 and 10 years. The fund also allocates the assets across different market sectors and maturities and potentially invests more than a quarter of its assets in municipal securities that finance similar types of objects.

FLTMX Fund Details

  • Fund Inception Date: April 1977
  • Ticker Symbol: FLTMX
  • CUSIP: 31638R204
  • Beta (3yr): 0.64
  • Rank in category: 63
  • Category: Muni National Intermediate
  • Yield: 2.58%
  • Tax Equivalent Yield: 3.44% (based on 25% income tax rate)
  • Capital Gains: N/A
  • Number of Years Up: 28 years
  • Number of Years Down: 5 years
  • Weighted Average Maturity: 5.5 years
  • Option Adjusted Duration: 5.3 years
  • Short-term Redemption Fee: 0.5% (30 days)
updated on May 2017

This FLTMX fund’s manager is Mark Sommer since July 2006. The minimum balance to invest in this fund for either brokerage or IRA account is $10,000. Also, there is no minimum subsequent investment. As part of no load fund, there is no extra fee for investing in this fund (i.e. there is no 12b1 fee and sales-load fee). The current expense ratio of this fund is 0.39% per year. The average expense ratio for the Muni National Intermediate category is 0.88%.

Fund Returns

The fund performance is listed below:
  • Year 2017: 1.78% (YTD)
  • Year 2016: -0.01%
  • Year 2015: 2.23%
  • Year 2014: 6.71%
  • Year 2013: -1.50%
FLTMX has recorded the best 1-year total return in year 2000 with 9.26% return. The worst return was in 1999 with -1.06% return. This fund has 4-stars rating from Morningstar. And it has an average of 4.38% of 5-year return.

This top Fidelity bond fund can be purchased from 60 brokerages include JP Morgan, T Rowe Price, Vanguard, FTJ Fund Choice, Firstrade, Wells Fargo Advisors MF Advisory, Bear Stearns, Scottrade TF, E Trade Financial, TD Ameritrade Inc, Ameriprise Brokerage, etc. To maximize your trade potential (i.e. buy or sell this mutual fund), it is better to open a Fidelity brokerage account. You can buy and sell Fidelity mutual fund and NTF mutual fund (no transaction fee fund). Also, you can buy and sell 30 iShares Exchange Traded Funds (ETF) for free with Fidelity online brokerage account.

As of March 2011, this best municipal bond fund has invested 50.88% of its assets in revenue bonds, 47.21% in general obligation bonds and 1.91% in cash & net other assets. The top 5 states for the asset allocation of this fund are New York, California, Illinois, Texas and Florida. The revenue source diversification as of March 2011 are 18.08% in local obligations, 17.01% in state obligations, 15.34% in health care, 12.25% in pooled loan/ other, 7.40% in escrowed/ special obligation/ pre-refund bonds, 7.35% in transportation, 5.64% in industrial revenue/ pollution control, 5.55% in electric utilities, 4.78% in water, sewer & gas utilities, 2.85% in universities/ student loans, 1.90% in cash & net other assets, 1.70% in resource recovery and 0.15% in housing. As of May 2011, this fund has 18.00% annual holdings turnover.

The top 10 holdings are Illinois Tool Hwy, New York State Energy Research & Dev. Authority, Farmington Poll, Illinois Dev. Finance Auth. Retirement, Palm Beach County Solid Waste Authority, Ohio Water Development Authority, Reedy Creek Impt District, Dallas Waterworks & Sewer System, Pennsylvania Tpk Commission, and Oklahoma Power Authority.

The advantages of investing in Municipal bond fund, also known as Muni bond fund, are you will earn regular income and the fund's yield is tax exempt from federal income tax (tax free or non taxable). Details about this fund are listed below. This fund is especially suitable for high income investor, retiree, near retirement investor, and conservative investor.

Investing in this Muni bond fund involve principal investment risks such as:
  • Municipal Market Volatility: Municipal market can be volatile due to adverse tax, legislative, political changes, and financial condition of municipal bond issuers.
  • Interest Rate Changes: The increase of interest rate can cause the debt security value to decrease (i.e. bond value will decrease with higher yield) 
  • Issuer Specific Changes: A decline in credit quality changes on individual bond can cause the price of an obligation to decrease.
Pros:
  • It is a no transaction fee fund
  • It has good long term performance
Cons:
  • none
Disclosure: No Position

Related bond fund review:

No comments:

Post a Comment

The Importance of Diversification in Investing

Diversification is a key principle in investing, and it's especially important in today's uncertain economic climate. By spreading y...