A Gold-Rated Intermediate-Term Bond Fund With an Edge
Fidelity Total Bond brings experienced leadership, deep resources, thoughtful positioning, and attractive fees.
Emory Zink: In the case of Fidelity Total Bond, an experienced portfolio management roster benefits from a wealth of support--including dozens of sector specialists, cutting-edge quantitative tools, and a robust cohort of analysts--all critical components to this team-managed offering that derives an edge from deep research and nimble implementation.
Besides investing in the typical investment-grade credit, mortgages, and U.S. Treasuries in the fund's Bloomberg Barclays U.S. Aggregate Bond Index benchmark, lead portfolio manager Ford O'Neil and his comanagers may allocate up to 20% in noninvestment-grade bonds, including high-yield and emerging-markets debt, when the team finds market valuations compelling. This gives the fund an edge versus more conservative benchmarklike intermediate-bond peers, but it may also invite more volatility.
Ultimately, though, this combination of resources and flexibility has supported attractive results. Over the trailing 10 years ended August 2018, the fund generated 4.7% annualized, ahead of its benchmark's 4.3%, and the fund ranked near the top quartile of the competitive intermediate-bond Morningstar Category, all the while keeping volatility in line with its typical peer.
Experienced leadership, deep resources, thoughtful positioning, and attractive fees underpin a disciplined track record and justify the fund's Morningstar Analyst Rating of Gold.
Emory Zink does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.