Fidelity Short Term Bond Fund

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
Hayden
Posts: 1125
Joined: Tue Apr 16, 2013 5:13 pm

Fidelity Short Term Bond Fund

Post by Hayden » Sun Dec 31, 2017 1:40 pm

I wanted to put money in a short term bond fund at Fidelity, and I see they have a new one, started 10/2017, Fidelity Short Term Bond Index Fund (FNSKX).

Any concerns about putting money into this new fund? It looks like the fund assets are low, and I have about $500,000 to invest.

Suggestions?

tibbitts
Posts: 7809
Joined: Tue Feb 27, 2007 6:50 pm

Re: Fidelity Short Term Bond Fund

Post by tibbitts » Sun Dec 31, 2017 1:53 pm

Hayden wrote:
Sun Dec 31, 2017 1:40 pm
I wanted to put money in a short term bond fund at Fidelity, and I see they have a new one, started 10/2017, Fidelity Short Term Bond Index Fund (FNSKX).

Any concerns about putting money into this new fund? It looks like the fund assets are low, and I have about $500,000 to invest.

Suggestions?
I don't think there's any issue at all with a new fund like you mentioned because the asset class is easy for the fund managers to invest in, and frankly short bonds and cash are paying close to each other so a little excess cash as part of the process won't be a huge hindrance (or help.) I kind of wonder about VG's new (well, newly opened to a wider investing base) emerging markets bond fund, though - I'm not sure about how it's going to do going forward vs. an established fund, until/unless assets ramp up and stabilize. But, I'm not an expert, so I decided to dip my toes into the pricey investor class shares anyway.

lack_ey
Posts: 6583
Joined: Wed Nov 19, 2014 11:55 pm

Re: Fidelity Short Term Bond Fund

Post by lack_ey » Sun Dec 31, 2017 1:55 pm

Press release says it follows the Bloomberg Barclays U.S. 1 – 5 Year Government/Credit Bond Index.

Schwab Short-Term Bond Index Fund (SWSBX) follows the Bloomberg Barclays U.S. Government/Credit 1-5 Year Index. I think that's the same thing, even though the words are transposed.

Vanguard Short-Term Bond Index Fund (VBIRX, VBISX, BSV) follows the very similar Bloomberg Barclays U.S. 1-5 Year Government/Credit Float Adjusted Index, which doesn't include some government holdings as part of the free float market cap.

It's pretty boring, high credit quality, duration under 3 years.

Are you really asking about the fund (as in, how the fund might track the index, if there are issues investing in a bond fund close to inception with low assets), or about the usefulness and applicability of this part of the fixed income market? To answer the latter you need to talk about your goals and what you're looking for. As for the former, I don't think there should be notable issues, considering the relatively high liquidity of these high-quality, short-term bonds.

RetiredCSProf
Posts: 140
Joined: Tue Feb 28, 2017 4:59 pm

Re: Fidelity Short Term Bond Fund

Post by RetiredCSProf » Sun Dec 31, 2017 2:17 pm

When I met with my Fido advisor a year ago, he recommended the Thompson Bond Fund (PONDX) for short-term bonds. I will be interested in hearing how this new Fido index fund compares.

User avatar
jhfenton
Posts: 3139
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Fidelity Short Term Bond Fund

Post by jhfenton » Sun Dec 31, 2017 2:30 pm

tibbitts wrote:
Sun Dec 31, 2017 1:53 pm
I kind of wonder about VG's new (well, newly opened to a wider investing base) emerging markets bond fund, though - I'm not sure about how it's going to do going forward vs. an established fund, until/unless assets ramp up and stabilize. But, I'm not an expert, so I decided to dip my toes into the pricey investor class shares anyway.
It's off-topic for this thread, but I did too. It's about 5% of fixed income and 1% of our portfolio, so not a big bet. If it makes our 80/20 portfolio more like 80.5/19.5, I'm OK with that.

To answer the original question, I have no doubt that FNSKX will be a fine fund. Fidelity has enormous experience running that kind of fund, and the price is right (6 bp).

mega317
Posts: 2470
Joined: Tue Apr 19, 2016 10:55 am

Re: Fidelity Short Term Bond Fund

Post by mega317 » Sun Dec 31, 2017 5:03 pm

RetiredCSProf wrote:
Sun Dec 31, 2017 2:17 pm
When I met with my Fido advisor a year ago, he recommended the Thompson Bond Fund (PONDX) for short-term bonds. I will be interested in hearing how this new Fido index fund compares.
Haha, PONDX is practically a junk fund. And the ER is 0.9%. OP, please don't consider that similar to the other short bond funds mentioned in this thread.

tibbitts
Posts: 7809
Joined: Tue Feb 27, 2007 6:50 pm

Re: Fidelity Short Term Bond Fund

Post by tibbitts » Sun Dec 31, 2017 5:14 pm

jhfenton wrote:
Sun Dec 31, 2017 2:30 pm
tibbitts wrote:
Sun Dec 31, 2017 1:53 pm
I kind of wonder about VG's new (well, newly opened to a wider investing base) emerging markets bond fund, though - I'm not sure about how it's going to do going forward vs. an established fund, until/unless assets ramp up and stabilize. But, I'm not an expert, so I decided to dip my toes into the pricey investor class shares anyway.
It's off-topic for this thread, but I did too. It's about 5% of fixed income and 1% of our portfolio, so not a big bet. If it makes our 80/20 portfolio more like 80.5/19.5, I'm OK with that.

To answer the original question, I have no doubt that FNSKX will be a fine fund. Fidelity has enormous experience running that kind of fund, and the price is right (6 bp).
Not exactly off-topic because the point is that whether being a tiny new fund matters depends somewhat on factors like how easy it is to invest in the asset class, how fast assets will ramp up, etc. In the OP's case the fund should behave like a long-established fund. In the emerging markets case, I'm not sure.

User avatar
jhfenton
Posts: 3139
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Fidelity Short Term Bond Fund

Post by jhfenton » Sun Dec 31, 2017 5:32 pm

tibbitts wrote:
Sun Dec 31, 2017 5:14 pm
jhfenton wrote:
Sun Dec 31, 2017 2:30 pm
tibbitts wrote:
Sun Dec 31, 2017 1:53 pm
I kind of wonder about VG's new (well, newly opened to a wider investing base) emerging markets bond fund, though - I'm not sure about how it's going to do going forward vs. an established fund, until/unless assets ramp up and stabilize. But, I'm not an expert, so I decided to dip my toes into the pricey investor class shares anyway.
It's off-topic for this thread, but I did too. It's about 5% of fixed income and 1% of our portfolio, so not a big bet. If it makes our 80/20 portfolio more like 80.5/19.5, I'm OK with that.

To answer the original question, I have no doubt that FNSKX will be a fine fund. Fidelity has enormous experience running that kind of fund, and the price is right (6 bp).
Not exactly off-topic because the point is that whether being a tiny new fund matters depends somewhat on factors like how easy it is to invest in the asset class, how fast assets will ramp up, etc. In the OP's case the fund should behave like a long-established fund. In the emerging markets case, I'm not sure.
I meant that my "me too!" regarding VEMBX was somewhat off topic. :beer May we both be happy with our new fund! :sharebeer

Post Reply