Is FLTMX a Strong Bond Fund Right Now?

Zacks Equity Research
·3 min read

If you're looking for a Muni - Bonds fund category, then a potential option is Fidelity Intermediate Municipals Income (FLTMX). FLTMX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify FLTMX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.

History of Fund/Manager

FLTMX is a part of the Fidelity family of funds, a company based out of Boston, MA. The Fidelity Intermediate Municipals Income made its debut in April of 1977 and FLTMX has managed to accumulate roughly $4.44 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. FLTMX has a 5-year annualized total return of 3.3% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.73%, 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. FLTMX's standard deviation over the past three years is 3.57% compared to the category average of 12.34%. The standard deviation of the fund over the past 5 years is 3.34% compared to the category average of 10.82%. This makes the fund less volatile than its peers over the past half-decade.

FLTMX carries a beta of 0.66, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.18, which measures performance on a risk-adjusted basis.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FLTMX is a no load fund. It has an expense ratio of 0.35% compared to the category average of 0.83%. So, FLTMX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

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.

For additional information on the Muni - Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FLTMX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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