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Is FLTMX a Strong Bond Fund Right Now?

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·4 min read
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Muni - Bonds fund seekers may want to consider taking a look at Fidelity Intermediate Municipals Income (FLTMX). FLTMX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FLTMX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.

History of Fund/Manager

FLTMX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Intermediate Municipals Income made its debut in April of 1977, and since then, FLTMX has accumulated about $4.95 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 3.11%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.8%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 13.13%, the standard deviation of FLTMX over the past three years is 3.58%. Over the past 5 years, the standard deviation of the fund is 3.43% compared to the category average of 10.99%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.54, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FLTMX has a negative alpha of -0.07, which measures performance on a risk-adjusted basis.

Ratings

Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, FLTMX has 52.48% in high quality bonds rated at least 'AA' or higher, while 44.56% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FLTMX is a no load fund. It has an expense ratio of 0.34% compared to the category average of 0.80%. Looking at the fund from a cost perspective, FLTMX is actually cheaper than its peers.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Intermediate Municipals Income ( FLTMX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Your research on the Muni - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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