Fidelity Floating Rate High Income Fund (FFRHX)

There are several types of Bond Mutual Funds. One of bond fund is bank loan bond fund. Bank loan funds are suitable for investors who will need to draw money at a predictable time. This bank loan fund usually pays an attractive yield and has short maturity and duration.

Other important features about Bank Loan Funds:

• The bonds in the fund are often below investment grade, but the return is equal or better than high yield money market accounts
• They are very short term
• The funds can provide less risk to investors
• Senior loan status typically returning 75% to 80% when they were default
• The fund shares can be purchased any time, but redemptions are restricted to monthly or quarterly depending on the funds.

The following Fidelity Floating Rate High Income fund is one of the best bank loan fund provided by Fidelity Investment fund. The details about the fund can be found below.

Fidelity Floating Rate High Income (FFRHX)

Fidelity FFRHX fund

The Fidelity Floating Rate High Income fund seeks a high level of current income. This Fidelity fund invests >80% of assets in floating rate loans, which are often lower-quality debt securities, and other floating rate securities. It may invest in companies in troubled or uncertain financial condition; money market and investment-grade debt securities, and repurchase agreements; domestic and foreign issuers. This FFRHX fund utilizes fundamental analysis of each issuer's financial condition and industry position and market and economic conditions to select investments.

FFRHX Fund Details

• Fund Inception Date: September 2002
• Ticker Symbol: FFHRX
• CUSIP: 315916783
• Beta (3yr): 0.31
• Rank in category (YTD): 91
• Category: Bank Loan
• Yield: 3.41%
• Net Assets: $6.45 billion 
• Capital Gains: N/A
• Number of Years Up: 7 years
• Number of Years Down: 1 year
• Average Duration: 4.38 years
• Average Maturity: 6.58 years

Christine McConnell has been the manager of this fund since August 2000 while this fund is introduced to investors on September 2002. It currently distributes 3.41% per year dividend. The minimum initial investment of this fund is $2,500 for brokerage account and $500 for IRA account. Both accounts require no minimum subsequent investment. As part of no load fund, this fund has no management fee and no front-end sales-load fee. It has 0.73% annual expense ratio. The fund’s total net assets are $6.45 billion.

The performance of this fund is as below: 

• 1-year: 6.01%
• 3-year: 5.65%
• 5-year: 4.84%
• 10-year: 4.55% 

This FFRHX fund is rated 5 stars rating by Morningstar. The fund has a year-to-date return of 2.0% with 5-year average return of 4.84%. The best 1-year total return among the 7 years of positive return was in 2009 with 28.86%. The worst fund’s performance was experienced in 2008 with -16.47%.

This FFRHX fund can be purchased from 61 brokerages, such as Vanguard, T Rowe Price, JP Morgan, ETrade No Load Fee, Firstrade, Ameritas NTF N, Scottrade, TD Ameritrade, E Trade Financial, etc. The fund also has other classes to invest such as: Class A (FFRAX), Class B (FFRBX), Class C (FFRCX), Institutional Class (FFRIX), and Class T (FFRTX).

As May 2011, the fund portfolio is allocated as follows: 71.64% in Term & Revolving loans, 13.7% in cash & net other assets, 9.24% in other floating rate securities, and 5.42% in fixed rate bonds. The top 10 major market sectors include healthcare, technology, telecommunications, cable tv, electric utilities, chemicals, broadcasting, automotive, services, and diversified financial services. The top holdings of this fund are HCA Inc Term, Community Health, Intelsat Jackson, Charter Com, Ford Motor Term, Univision Comm, Freescale Semi, NXP BV and Dynegy Inc. The top holdings of this fund represent 13.97% of the portfolio out of 546 holdings.

Investing in this mutual fund involves risks such as:

• Issuer-Specific Changes
• Collateral Impairment
• Floating Rate Loan Liquidity
• Interest Rate Changes
• Foreign Exposure

Disclosure: No Position

Other Taxable Bond Funds article:

• Sit US Government Securities (SNGVX)
• PIMCO Income Fund (PONAX)