Fidelity bonds FTBFX v/s FSITX

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ngando
Posts: 7
Joined: Wed Jul 25, 2018 9:34 pm

Fidelity bonds FTBFX v/s FSITX

Post by ngando » Thu Sep 13, 2018 10:14 am

Hello,

I need to do my Bond allocation in my 401k. I have fidelity and use the brokerage link. That means I have access to some bond indexes that are better options than the ones my employer provides. More specifically, if I buy Fidelity indexes there's no additional fees.

I've been looking at these two indexes to do my allocation. Seems like FTBFX is actively managed and has a 0.45% ER. On the other hand FSITX is managed less actively and has an ER of 0.025%.

The managed fund has a higher return on average, but was wondering if this is worth it at all given the way higher fees (20 times higher?).

Flyer24
Posts: 213
Joined: Sun Apr 08, 2018 4:21 pm

Re: Fidelity bonds FTBFX v/s FSITX

Post by Flyer24 » Thu Sep 13, 2018 10:44 am

Higher returns also means higher risk. The managed fund holds more corporate and junk bonds than the index. You might look at what it did during the 2008 recession.

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oldcomputerguy
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Re: Fidelity bonds FTBFX v/s FSITX

Post by oldcomputerguy » Thu Sep 13, 2018 10:48 am

ngando wrote:
Thu Sep 13, 2018 10:14 am
Hello,

I need to do my Bond allocation in my 401k. I have fidelity and use the brokerage link. That means I have access to some bond indexes that are better options than the ones my employer provides. More specifically, if I buy Fidelity indexes there's no additional fees.

I've been looking at these two indexes to do my allocation. Seems like FTBFX is actively managed and has a 0.45% ER. On the other hand FSITX is managed less actively and has an ER of 0.025%.

The managed fund has a higher return on average, but was wondering if this is worth it at all given the way higher fees (20 times higher?).
FTBFX is not an index fund, it is actively managed. It also is higher in corporate bonds than FSITX, so is a bit more correlated to the stock market and thus is an inferior diversifier.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

ngando
Posts: 7
Joined: Wed Jul 25, 2018 9:34 pm

Re: Fidelity bonds FTBFX v/s FSITX

Post by ngando » Thu Sep 13, 2018 10:33 pm

Thanks for the help! Thought it was an index for whatever reason! 👍

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