Comparing Vanguard and Fidelity Total Bond funds

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Comparing Vanguard and Fidelity Total Bond funds

Postby Austintatious » Sun Feb 10, 2013 12:47 pm

I'm been looking at the Vanguard and Fidelity Total Bond funds, and wondering why they've performed as differently as they have in recent years (per Morningstar's data). I've been surprised at the difference.

VBTLX - ER is .10%, average duration is 4.97 years

2012 - 4.15
2011 - 7.69
2010 - 6.54
2009 - 6.04
2008 - 5.15

FTBFX - ER is .45%; average duration is 4.74 years

2012 - 6.51
2011 - 7.4
2010 - 8.55
2009 - 19.8
2008 - -5.56

Except for the slightly better performance of VBTLX in 2011 and the remarkably better performance in 2008, FTBFX has done considerably better. Would one factor be that VBTLX is weighted heavier in the government-backed bond categories (assuming I've got that right)? Any thoughts?
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Re: Comparing Vanguard and Fidelity Total Bond funds

Postby dkturner » Sun Feb 10, 2013 1:16 pm

The Fidelity Total Bond fund is actively managed while the Vanguard Total Bond Fund is an index fund that closely follows the make-up of the Barclays Aggregate Bond Index. Over the last four years under weighting US government securities in a bond portfolio has been a winning strategy.
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Re: Comparing Vanguard and Fidelity Total Bond funds

Postby Doc » Sun Feb 10, 2013 1:22 pm

There was a long discussion recently about the portfolio's of so called TBM funds.

viewtopic.php?f=10&t=108922

The portfolios are quite dissimlar. Moreover the Bar Cap Agg Index itself has changed markedly since 2008 making historical comparisons less useful.

BTW Fidelity Total Bond FTBFX is not a TBM Index fund. The Fidelity index fund is Spartan U.S. Bond Index Investor FBIDX.
A scientist looks for THE answer to a problem, an engineer looks for AN answer. Investing is not a science.
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Re: Comparing Vanguard and Fidelity Total Bond funds

Postby Austintatious » Sun Feb 10, 2013 1:54 pm

dkturner and Doc, you've hit upon the problem, which is that I had confused Fidelity's FTBFX for it's Spartan Index fund FBIDX, which I had known was in the Fidelity stable. It was their use of the name "Fidelity Total Bond Fund" for FTBFX that did it. I'm back on track, now. That said, this FBTFX performance is pretty impressive, although that negative 5% in 2008 is pretty ugly. Thanks for responding.
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