Fidelity Total Bond Fund (FTBFX)

One of the most popular bond mutual funds is Fidelity Total Bond Fund. More about this fixed income mutual fund review can be found below. Investing in diversified bond mutual funds is essential for investors. Diversified bond funds can provide a predictable income stream.

Fidelity Total Bond (Ticker: FTBFX)

The Fidelity Total Bond fund’s objective is to achieve a high level of current income. This bond fund typically invests majority of assets in debt securities of all types. The fund’s adviser uses the Barclays Capital U.S. Universal Bond Index as a guide for allocating its assets through the investment-grade, high yield, and emerging market asset classes.

Fund Profile

• Fund Inception Date: October 15, 2002
• Ticker Symbol: FTBFX
• CUSIP: 31617K881
• Beta (3yr): 0.81
• Rank in category (YTD): 58%
• Category: Intermediate-Term Bond
• Yield: 3.54%
• Capital Gains: 0%
• Expense Ratio: 0.45%
• Net Assets: $ 15.03 billion
• Number of Years Up: 8 years
• Number of Years Down: 1 year
• Annual Turnover Rate: 168%

Updated on 5/19/2012

Ford G. O’Neil is the current lead manager of this Fidelity fund. He has managing this top performer taxable bond fund since December 2004. Another fund manager is Matt Conti (2007). It has total net assets of $15.03 billion. It also has an expense ratio of 0.45% compared to the average expense ratio in the Intermediate-Term Bond category of 0.92%. This top rated mutual fund has a yield of 3.54%. This yield is distributed on monthly basis. The annual holdings turnover as of March 13, 2012 is 168%.

Fidelity Total Bond fund

Morningstar has ranked this intermediate term bond mutual fund with 4-star rating. It also got a Gold rating from the Morningstar analysts. Standard and Poor’s has rated this fund with 5 stars. Zacks investment research has ranked this mutual fund with strong buy. The best 1-year total return was achieved in 2009 with 19.80%. Based on the load adjusted return, this mutual fund has returned 12.03% over the past 3-year and 6.60% over the past 5-year. The YTD return is 1.64%.

The minimum initial purchase needed to open a brokerage account in this best Fidelity fund is $2,500. For a retirement or IRA account, you will only need an initial investment of $500. This mutual fund is available for purchase through 72 brokerages, such as JPMorgan, Fidelity Retail Funds Network, Schwab Retail, Ameriprise Brokerage, ETrade No Load Fee, etc.

Best Taxable Bond Mutual Funds of September 2011

Top 5 issuers as of December 2011 are United States Treasury, FNMA GTD MTG Pass THRU CTF, FED Home Loan MTG Corp – Gold, GNMA Guaranteed Pass THRU CERT and Freddie MAC. They represent 52.88% of the portfolio. This fund has 2427 total number of holdings. The top asset class diversification is Investment Grade Bonds, High Yield Investments, Emerging Market Investments and Cash & Net Other Assets.

Per fund’s prospectus, the Principal Investment Risks are: interest rate risk, foreign exposure risk, prepayment risk, leverage risk, etc.

Advantages and Disadvantages

Pros:

• Low expense ratio and no sales load
• Management has long term track record

Cons:

• Actively managed
• High annual holdings turnover rate

Disclosure: No Position

Other taxable bond mutual funds post:

• Dodge & Cox Income fund
• Vanguard Intermediate Term Investment Grade fund