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Fidelity Floating Rate High Income Message Board

  • snoit123 snoit123 Jul 23, 2007 10:13 AM Flag

    LAST SEMI-ANNUAL REPORT

    ........says 9.5% nonconvertible bonds. Some of these bonds mature in 2012 and 2013 which is far enough away to be taking a whacking like the junk bond market. Christine says that these floating rate loans are becoming more like the junk bond market. If the FED cuts later this year, it will kick this fund upward since it is short term maturities for the most part.

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    • The Fidelity website has information on this fund. It has a avg. weighted maturity of about 4.2 years - it is acting like a short term junk bond fund - the short term + floating rate helps hold down volatility but PHK, a real junk bond fund, has dropped 6% in the last week. It is about to shake me out again - the elevator is going down and I have no idea what floor it is going to stop on.

    • Interest rates down, this fund down. It should work the opposite. And, with recent price declines I am beginning to wonder what the exposure is.

      I am out completely as of today. Enough.

    • I agree that the upside benefit is small and the downside risk, which also appeared to be small, has turned out to be susbstantial. I got out and I don't see any reason to be in this type of fund again.

      If you wanted a better rate of return, I would suggest a good short-term bond fund where the upside/downside risk should be more balanced.

    • the fund itself may be fine. However, it seems many were attracted to this fund for two main reasons:

      1. its stable yield as a source of income (still there)
      2. its stability (no comment)

      I just do not see the benefit of investing in this type of fund with the price risk we have just unfortunately witnessed.

      I think investors would stay clear of funds who just lost 3 years of price appreciation in the span of a few weeks, with nothing overly significant happening in the market place. CDs at a bank would give you better return than this fund has. Risk is not worth it for minimal appreciation.

    • I thought this fund was predominately invested in floating-rate loans that shouldn't be subject to interest rate swings.

      It has delined more in the past several weeks than the cumultive movement in the last three years. I'm not wanting this amount of volitilty.

      • 1 Reply to HortaFan
      • I agree. I sold the rest of my position that I had invested in early this year. Even taking a slight hit on some short term trading. The short term trading is nothing when compared to the trend this fund has been going.

        I had initially invested in this fund to get a better rate on income instead of CDs and as a place to hold dividends for short term cash but the recent swings were just way to much, and only going down. At first it was a penny or two a day. Now its loosing 5+ cents.

        The risk here is not worth the gain at all. I may buy some small amounts if it gets down toward low 9s dollars.

 
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