What happened to FXNAX during 2008?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
Blue456
Posts: 110
Joined: Tue Jun 04, 2019 5:46 am

What happened to FXNAX during 2008?

Post by Blue456 » Sat Nov 16, 2019 8:28 am

Does anybody have data/info what happened to US Bond Index Fund in 2008?

youngpleb
Posts: 288
Joined: Mon Oct 16, 2017 7:06 pm
Location: VA, USA

Re: What happened to FXNAX during 2008?

Post by youngpleb » Sat Nov 16, 2019 8:37 am

Doesn't look like FxNAX was a thing until 2011, but I'd imagine it would have performed the same as any other total bond index--dropping slightly in value but then surging.

retiredjg
Posts: 38491
Joined: Thu Jan 10, 2008 12:56 pm

Re: What happened to FXNAX during 2008?

Post by retiredjg » Sat Nov 16, 2019 8:40 am

Total bond index funds took a dip in the bear market, but not a terribly big one. These funds outperformed stock funds for several (rolling) decades back then. In other words, the bonds did what they are supposed to do.

User avatar
JAZZISCOOL
Posts: 359
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: What happened to FXNAX during 2008?

Post by JAZZISCOOL » Sat Nov 16, 2019 9:12 am

youngpleb wrote:
Sat Nov 16, 2019 8:37 am
Doesn't look like FxNAX was a thing until 2011, but I'd imagine it would have performed the same as any other total bond index--dropping slightly in value but then surging.
Agree. Inception date was May 2011 per Schwab.

retiredjg
Posts: 38491
Joined: Thu Jan 10, 2008 12:56 pm

Re: What happened to FXNAX during 2008?

Post by retiredjg » Sat Nov 16, 2019 9:27 am

Just to point out a curiosity...Fidelity says the fund inception date was in 1990 and the share class inception was 2011.

https://fundresearch.fidelity.com/mutua ... /316146356

Not sure how that can be since I recall they did not have a total bond index fund during the last unpleasantness (starting in 2007).

People were using Fidelity Total Bond fund, an actively managed fund, thinking they were buying the total bond index fund.

So I'm not sure what is going on. And it does not really matter for this question - all the total bond index funds should have performed essentially the same back in 2007 - 2009.

IMhooked
Posts: 32
Joined: Tue Oct 23, 2018 2:02 pm

Re: What happened to FXNAX during 2008?

Post by IMhooked » Sat Nov 16, 2019 9:52 am

This thread is ONE REASON WHY I come to Bogleheads. Simple personal errors I made........JUST realized as my wife and I are starting to consider bonds in our portfolio we've been putting into FTBFX versus FXNAX (active vs. index) in our Solo401k this year. WHOOPS! If we had a Financial GPS on the dash, then she just announced 'rerouting' :oops: :D

Thank you Bogleheads!

yogesh
Posts: 411
Joined: Thu Oct 11, 2012 6:20 pm

Re: What happened to FXNAX during 2008?

Post by yogesh » Sat Nov 16, 2019 9:55 am

Fidelity loves this.
Index and non-index funds are named closer
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

MAJIC9
Posts: 14
Joined: Sun Jul 22, 2018 1:04 pm

Re: What happened to FXNAX during 2008?

Post by MAJIC9 » Sat Nov 16, 2019 10:01 am

FBIDX, FSITX, FXSTX, adn FXNAX were different share classes of the same fund.. all consolidated into FXNAX some time ago..

User avatar
JAZZISCOOL
Posts: 359
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: What happened to FXNAX during 2008?

Post by JAZZISCOOL » Sat Nov 16, 2019 10:04 am

retiredjg wrote:
Sat Nov 16, 2019 9:27 am
Just to point out a curiosity...Fidelity says the fund inception date was in 1990 and the share class inception was 2011.

https://fundresearch.fidelity.com/mutua ... /316146356

Not sure how that can be since I recall they did not have a total bond index fund during the last unpleasantness (starting in 2007).

People were using Fidelity Total Bond fund, an actively managed fund, thinking they were buying the total bond index fund.

So I'm not sure what is going on. And it does not really matter for this question - all the total bond index funds should have performed essentially the same back in 2007 - 2009.
I don't use Fidelity but I did note the following on your link:

Historical Fund Information Historical Fund Information Additional Information
Name Change: Formerly Fidelity U.S. Bond Index Fund - Institutional Premium Class. 11/2/2018
Name Change: Formerly Spartan U.S. Bond Index Fund - Fidelity Advantage Institutional Class. 6/14/2016

It is common for many MF families to merge funds, change names and splice returns so it is important to read footnotes, etc. While this doesn't speak to earlier years, it shows Fidelity has changed names of funds (which means different tickers, etc.) I also checked Etrade's fund report and they show the inception is May 4, 2011. If one really wants to research the details, I would suggest reading prospectus for more info. :|

retired@50
Posts: 686
Joined: Tue Oct 01, 2019 2:36 pm

Re: What happened to FXNAX during 2008?

Post by retired@50 » Sat Nov 16, 2019 10:04 am

IMhooked wrote:
Sat Nov 16, 2019 9:52 am
This thread is ONE REASON WHY I come to Bogleheads. Simple personal errors I made........JUST realized as my wife and I are starting to consider bonds in our portfolio we've been putting into FTBFX versus FXNAX (active vs. index) in our Solo401k this year. WHOOPS! If we had a Financial GPS on the dash, then she just announced 'rerouting' :oops: :D

Thank you Bogleheads!
Always pay attention to the expense ratio! If it's over 15 basis points, it's probably not a passively managed index fund.

Regards,

User avatar
oldcomputerguy
Moderator
Posts: 6445
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods in East Tennessee

Re: What happened to FXNAX during 2008?

Post by oldcomputerguy » Sat Nov 16, 2019 10:08 am

retiredjg wrote:
Sat Nov 16, 2019 9:27 am
Just to point out a curiosity...Fidelity says the fund inception date was in 1990 and the share class inception was 2011.

https://fundresearch.fidelity.com/mutua ... /316146356

Not sure how that can be since I recall they did not have a total bond index fund during the last unpleasantness (starting in 2007).
According to mutualfunds.com, FBIDX (U.S. Bond Index Investor shares) had an inception date of March 8, 1990, the same date as FXNAX. The Advantage-class fund FSITX didn't come along until May 4, 2011, though.
"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." (Aaron Sorkin)

User avatar
JAZZISCOOL
Posts: 359
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: What happened to FXNAX during 2008?

Post by JAZZISCOOL » Sat Nov 16, 2019 10:09 am

retired@50 wrote:
Sat Nov 16, 2019 10:04 am
IMhooked wrote:
Sat Nov 16, 2019 9:52 am
This thread is ONE REASON WHY I come to Bogleheads. Simple personal errors I made........JUST realized as my wife and I are starting to consider bonds in our portfolio we've been putting into FTBFX versus FXNAX (active vs. index) in our Solo401k this year. WHOOPS! If we had a Financial GPS on the dash, then she just announced 'rerouting' :oops: :D

Thank you Bogleheads!
Always pay attention to the expense ratio! If it's over 15 basis points, it's probably not a passively managed index fund.

Regards,
Schwab shows the FXNAX expense ratio as 2.5 basis points (0.025%). Agree, look at the full description of the fund name and see if it has "index" or "passive" in the name. :shock:

pkcrafter
Posts: 13667
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: What happened to FXNAX during 2008?

Post by pkcrafter » Sat Nov 16, 2019 10:10 am

Blue456 wrote:
Sat Nov 16, 2019 8:28 am
Does anybody have data/info what happened to US Bond Index Fund in 2008?
Don't have data of Fidelity TB index performance, but Vanguard's fund, VBMFX, was up 5% in 2008.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

User avatar
JAZZISCOOL
Posts: 359
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: What happened to FXNAX during 2008?

Post by JAZZISCOOL » Sat Nov 16, 2019 10:15 am

pkcrafter wrote:
Sat Nov 16, 2019 10:10 am
Blue456 wrote:
Sat Nov 16, 2019 8:28 am
Does anybody have data/info what happened to US Bond Index Fund in 2008?
Don't have data of Fidelity TB index performance, but Vanguard's fund, VBMFX, was up 5% in 2008.

Paul
Yes, and Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) in 2008 was +5.15% while the category average was -4.70% (Yahoo finance). The category is filled with active funds.

Topic Author
Blue456
Posts: 110
Joined: Tue Jun 04, 2019 5:46 am

Re: What happened to FXNAX during 2008?

Post by Blue456 » Sat Nov 16, 2019 10:56 am

pkcrafter wrote:
Sat Nov 16, 2019 10:10 am
Blue456 wrote:
Sat Nov 16, 2019 8:28 am
Does anybody have data/info what happened to US Bond Index Fund in 2008?
Don't have data of Fidelity TB index performance, but Vanguard's fund, VBMFX, was up 5% in 2008.

Paul
Wait...wait... so I can actually make money off of bond index funds during market crash?

tibbitts
Posts: 9375
Joined: Tue Feb 27, 2007 6:50 pm

Re: What happened to FXNAX during 2008?

Post by tibbitts » Sat Nov 16, 2019 11:22 am

Blue456 wrote:
Sat Nov 16, 2019 10:56 am
pkcrafter wrote:
Sat Nov 16, 2019 10:10 am
Blue456 wrote:
Sat Nov 16, 2019 8:28 am
Does anybody have data/info what happened to US Bond Index Fund in 2008?
Don't have data of Fidelity TB index performance, but Vanguard's fund, VBMFX, was up 5% in 2008.

Paul
Wait...wait... so I can actually make money off of bond index funds during market crash?
It depends on the details and causes of an equity market crash. I think it would be a mistake to believe that bonds will always rescue you from all equity downturns. Holding something that drop 20% vs. 30% may be helpful, but not all that enticing.

retiredjg
Posts: 38491
Joined: Thu Jan 10, 2008 12:56 pm

Re: What happened to FXNAX during 2008?

Post by retiredjg » Sat Nov 16, 2019 11:33 am

Blue456 wrote:
Sat Nov 16, 2019 10:56 am
pkcrafter wrote:
Sat Nov 16, 2019 10:10 am
Blue456 wrote:
Sat Nov 16, 2019 8:28 am
Does anybody have data/info what happened to US Bond Index Fund in 2008?
Don't have data of Fidelity TB index performance, but Vanguard's fund, VBMFX, was up 5% in 2008.

Paul

Wait...wait... so I can actually make money off of bond index funds during market crash?
Yes you can! :D

This does not mean you always will.


If you compare total stock index market to total bond market index for 10 year cycles (2000 - 2009, 2001 - 2010, etc) you will see that bonds outperformed stocks for quite a long time. Or just google "the lost decade" and see what you find.


I guess this is a light bulb moment for you. This is why most of us old farts are always encouraging people to hold some bonds. During the last market unpleasantness from 2007 to 2009, I was happy to have something producing income in my portfolio. :happy

User avatar
arcticpineapplecorp.
Posts: 4526
Joined: Tue Mar 06, 2012 9:22 pm

Re: What happened to FXNAX during 2008?

Post by arcticpineapplecorp. » Sat Nov 16, 2019 11:45 am

IMhooked wrote:
Sat Nov 16, 2019 9:52 am
This thread is ONE REASON WHY I come to Bogleheads. Simple personal errors I made........JUST realized as my wife and I are starting to consider bonds in our portfolio we've been putting into FTBFX versus FXNAX (active vs. index) in our Solo401k this year. WHOOPS!\
so if you want to see how FTBFX (not FXNAX) active bond fund did during 2008 versus Vanguard's total bond market admiral (index) fund VBTLX did here it is:
As you can see the fidelity active bond fund (ftbfx in blue on the chart) ended DOWN -6.41% in 2008 but Vanguard's total bond market index (admiral in orange on the chart below) ended UP +4.52%. Hope that helps see the difference and answer your specific question.

costs most definitely matter. Even more so on bond funds. looks like ftbfx's expense ratio is 0.45% whereas vbtlx is .04% (fidelity's active bond fund is 10X more costly than Vanguard's index version).

Image
Last edited by arcticpineapplecorp. on Sat Nov 16, 2019 11:47 am, edited 2 times in total.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

User avatar
nisiprius
Advisory Board
Posts: 39475
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: What happened to FXNAX during 2008?

Post by nisiprius » Sat Nov 16, 2019 11:47 am

I owned Fidelity's FBIDX, which was a Total Bond Market Index Fund, for a long time (it was the only choice in my employer's 401(k)). It did a reasonably good job of tracking the (then-Barclay's) Aggregate Bond Index. In 2007 it underperformed the index by enough to be annoying and embarrassing. Interestingly enough, Vanguard's Total Bond fund had done about the same thing back in 2002.

I am not sure what happened to FBIDX versus FXNAX, whether they are the same fund or not, but whatever Morningstar is plotting for FXNAX, you can see that effect. It wasn't very important and had the interesting effect of opening up a tiny gap between the funds in 2002, when Vanguard (orange) falls behind... and then the cap closes in 2007 with Fidelity stumbling. It's hardly noticeable.

But your question was about 2008, and the answer is that the aggregate index, and bond index funds including FXNAX or whatever Morningstar is displaying for "FXNAX," and Vanguard Total Bond, all did fine. They sailed almost straight through, steady-eddy, same slow growth as always, with no hint of anything particular happening in 2008-2009. That's because during that period of time Treasuries actually experienced a small gain, possibly due to a "flight to safety," while corporates took about 10% hit, and in the mixture found in the aggregate index, they pretty much offset each other.

Source

Image
Last edited by nisiprius on Sat Nov 16, 2019 11:56 am, edited 2 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

User avatar
arcticpineapplecorp.
Posts: 4526
Joined: Tue Mar 06, 2012 9:22 pm

Re: What happened to FXNAX during 2008?

Post by arcticpineapplecorp. » Sat Nov 16, 2019 11:55 am

I'm not sure why some are saying FXNAX didn't exist in 2008. Fidelity shows date of inception 3/8/1990:
https://fundresearch.fidelity.com/mutua ... /316146356

so using 2008 as your guide we can compare fxnax to vbtlx. Vanguard's fund still did better in 2008:
Vanguard (VBTLX): +4.52%
Fidelity (FXNAX): +3.16%

Image
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

User avatar
nisiprius
Advisory Board
Posts: 39475
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: What happened to FXNAX during 2008?

Post by nisiprius » Sat Nov 16, 2019 12:02 pm

I'm not sure why some are saying FXNAX didn't exist in 2008.
Because there's something odd about FXNAX. This might be the answer. FBIDX, which is the fund I once owned, did go back to about the same time as Vanguard Total Bond. It was a bond index fund but was not in their Spartan series and had about an 0.45% expense ratio. FBIDX doesn't show up as a current ticker symbol. But Fidelity's website, here, is showing
Historical Fund Information: Additional Information
Name Change: Formerly Fidelity U.S. Bond Index Fund - Institutional Premium Class. 11/2/2018
Name Change: Formerly Spartan U.S. Bond Index Fund - Fidelity Advantage Institutional Class. 6/14/2016
So I'm thinking they are all different share classes of the same fund, and the older, higher-ER funds and their ticker symbols might have been retired and the funds merged into the former institutional premium class. Or something like that.

Fidelity has been doing a lot of that and it's a little hard to figure out continuity in ticker symbols. Vanguard, same thing. When you ask Morningstar to chart something like VBTLX, which is an Admiral share class that, according to Vanguard, had inception 11/12/2001, Morningstar displays a chart going back to 12/11/1986, which, according to Vanguard is the inception date for VBMFX (investor share class, now closed).

So when you ask Morningstar to show "VBTLX," it apparently is splicing returns for VBMFX from 12/11/1986 to 11/12/2001, and VBTLX thereafter.

Pretty confusing.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

User avatar
nisiprius
Advisory Board
Posts: 39475
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: What happened to FXNAX during 2008?

Post by nisiprius » Sat Nov 16, 2019 12:11 pm

Here's what Fidelity's website is showing for FXNAX inception date. I should have noticed this a few minutes ago.

FXNAX

Fund Inception
3/8/1990

Share Class Inception
5/4/2011

Image
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

MAJIC9
Posts: 14
Joined: Sun Jul 22, 2018 1:04 pm

Re: What happened to FXNAX during 2008?

Post by MAJIC9 » Sat Nov 16, 2019 12:33 pm

nisiprius wrote:
Sat Nov 16, 2019 11:47 am

I am not sure what happened to FBIDX versus FXNAX, whether they are the same fund or not,
https://www.fidelity.com/bin-public/060 ... f_FAQs.pdf

page 8 of that doc :)

Ferdinand2014
Posts: 846
Joined: Mon Dec 17, 2018 6:49 pm

Re: What happened to FXNAX during 2008?

Post by Ferdinand2014 » Sat Nov 16, 2019 11:46 pm

Blue456 wrote:
Sat Nov 16, 2019 8:28 am
Does anybody have data/info what happened to US Bond Index Fund in 2008?
It was FSITX. Followed same index. Different class. Higher expense. All classes were consolidated into FXNAX in 2018 with lowest expense ratio of .025. Fidelity got rid of separate classes of all index funds to lowest expense ratio institutional version. It was up about 5% - by memory. Fidelity shows FXNAX data (FSITX before 2018) to 2009 (10 years). My recollection was 5%.

https://www.fidelity.com/bin-public/060 ... f_FAQs.pdf

FBIDX 0.14 + FSITX .045. + FXSTX .035 became > FXNAX .025 in 2018.

Fund started 1990.

FXNAX share class started 2011

All share classes became FXNAX in 2018
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

Ferdinand2014
Posts: 846
Joined: Mon Dec 17, 2018 6:49 pm

Re: What happened to FXNAX during 2008?

Post by Ferdinand2014 » Sat Nov 16, 2019 11:58 pm

nisiprius wrote:
Sat Nov 16, 2019 12:02 pm
I'm not sure why some are saying FXNAX didn't exist in 2008.
Because there's something odd about FXNAX. This might be the answer. FBIDX, which is the fund I once owned, did go back to about the same time as Vanguard Total Bond. It was a bond index fund but was not in their Spartan series and had about an 0.45% expense ratio. FBIDX doesn't show up as a current ticker symbol. But Fidelity's website, here, is showing
Historical Fund Information: Additional Information
Name Change: Formerly Fidelity U.S. Bond Index Fund - Institutional Premium Class. 11/2/2018
Name Change: Formerly Spartan U.S. Bond Index Fund - Fidelity Advantage Institutional Class. 6/14/2016
So I'm thinking they are all different share classes of the same fund, and the older, higher-ER funds and their ticker symbols might have been retired and the funds merged into the former institutional premium class. Or something like that.

Fidelity has been doing a lot of that and it's a little hard to figure out continuity in ticker symbols. Vanguard, same thing. When you ask Morningstar to chart something like VBTLX, which is an Admiral share class that, according to Vanguard, had inception 11/12/2001, Morningstar displays a chart going back to 12/11/1986, which, according to Vanguard is the inception date for VBMFX (investor share class, now closed).

So when you ask Morningstar to show "VBTLX," it apparently is splicing returns for VBMFX from 12/11/1986 to 11/12/2001, and VBTLX thereafter.

Pretty confusing.
FBIDX 0.14 + FSITX .045. + FXSTX .035 became > FXNAX .025 in 2018.

Fund started 1990.

FXNAX share class started 2011

All share classes became FXNAX in 2018
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

Post Reply