Understood that this fund was short term floating rate items , and would be expected to go up, after a lag, with interest rates ie better return with a somewhat constant price .. but you have indicated better funds What do you recommend for short term parking of funds?? Thanks
There is nothing wrong with this fund! The PROBLEM, and it is a major one, is with the fund manager, who is a complete incompetent. She is an idiot or even worse, a moron. She has her job because Abigail Jpohnson doesn't like to fire her female staff, no matter how incompetent they are. Abigail doesn't want it appear that she made a mistake with Christine. If Abigail would grow a pair and finally fire Christine, the fund will improve marketly. Send a letter to Fidelity calling for Christine to be terminated and tell the company how displeased you are with Christine's performance. If they terminate her, within weeks we will be trading at 11.50 plus. But right now the OLD GIRL'S NETWORK is killing Fidelity investors.
re "Understood that this fund was short term floating rate items , and would be expected to go up, after a lag, with interest rates ie better return with a somewhat constant price"
That's exactly what it does and it's been very successful at it. It's managed fairly conservatively compared to other floating rate funds which tend to use a lot of leverage and thus could have somewhat higher returns. Once we get into a rising rate environment the fund will indeed keep a pretty stable NAV while as you note while the yield will rise as opposed to regular bond funds where the NAV will fall with rising rates.
In terms of safety if we got back to a Lehman panic type situation or the economy plunged again floating rate funds like this will do poorly due to more of the short term loans defaulting. We currently have a growing economy so for now I think the chance of that is negligible but if you want absolute safety you'd want a money market fund which pays near zero. The current 30 day sec yield on this fund is 3.46% so you're getting paid for that low amount of risk.
The person who's post concerned you has been whining about the fund and the manager forever and never seems to understand how it works whenever I occasionally check over here. I put a great deal in this for a fixed income portfolio I run for my elderly mother and I did not want exposure to interest rate risk at this time and unlike 2008 am not that worried about credit risk for now especially for this rather conservative fund.