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If you have been looking for High Yield - Bonds funds, a place to start could be Fidelity High Income (SPHIX - Free Report) . SPHIX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that SPHIX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
SPHIX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity High Income debuted in August of 1990. Since then, SPHIX has accumulated assets of about $4.32 billion, according to the most recently available information. Fred Hoff is the fund's current manager and has held that role since June of 2000.
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 4.98%, and it sits 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 5.92%, 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 4.67%, the standard deviation of SPHIX over the past three years is 5.73%. The standard deviation of the fund over the past 5 years is 5.17% compared to the category average of 4.5%. This makes the fund more volatile than its peers over the past half-decade.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 6.27% means that a $10,000 investment should result in a yearly payout of $627.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks. SPHIX carries a beta of 0.4, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 3.93, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SPHIX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.03%. SPHIX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity High Income ( SPHIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the High Yield - 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is SPHIX a Strong Bond Fund Right Now?
If you have been looking for High Yield - Bonds funds, a place to start could be Fidelity High Income (SPHIX - Free Report) . SPHIX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that SPHIX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
SPHIX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity High Income debuted in August of 1990. Since then, SPHIX has accumulated assets of about $4.32 billion, according to the most recently available information. Fred Hoff is the fund's current manager and has held that role since June of 2000.
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 4.98%, and it sits 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 5.92%, 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 4.67%, the standard deviation of SPHIX over the past three years is 5.73%. The standard deviation of the fund over the past 5 years is 5.17% compared to the category average of 4.5%. This makes the fund more volatile than its peers over the past half-decade.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 6.27% means that a $10,000 investment should result in a yearly payout of $627.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks. SPHIX carries a beta of 0.4, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 3.93, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SPHIX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.03%. SPHIX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity High Income ( SPHIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the High Yield - 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.