3 Good Funds Having a Great Year

#Morningstar #Vanguard #FidelityInvestments

These funds from Vanguard, Fidelity and FPA shine in tough times.

0:00 Good Downside Protection in a Bear Market
0:23 Vanguard Short-Term Inflation Protected Securities (VTAPX)
0:53 FPA New Income (FPNIX)
1:09 Fidelity Intermediate Bond (FTHRX)

Russel Kinnel: Good downside protection is an underrated quality in a bull market, but boy is it a lifesaver in a bear market. Today, I’ll highlight three funds producing strong performance by losing less than their peers. These are the sort of funds that help you stay invested though tough times. If you give up in a bear market, you’ll substantially reduce your long-term returns.

Vanguard Short-Term Inflation Protected Securities is down 1.3% year to date, making it one of the top performing TIPS funds. The Gold-rated fund has the benefit of low costs, which always help in down markets. But the big reason for its performance is it has less interest-rate risk than its peers. Yes, TIPS have inflation protection, but they don’t have protection against rising rates. This is one of the few short-term TIPs funds it is holding up well.

Bronze-rated FPA New Income is all about defense. The fund is wary about credit risk and interest-rate risk and thus consistently has a very low risk profile. Its 3% loss is smaller than 90% of short-term bond funds.

Fidelity Intermediate Bond’s absolute loss of 8% for the year to date, sounds grim, but that’s actually in the top 5% of intermediate bond funds. That shows just how bad things have been for intermediate bonds. The category is down 11.5% for the year as credit problems and surging interest rates have crushed a group that can usually be relied upon for solid returns. Rob Galuzza has some tight guardrails on credit and interest-rate risk that keeps this fund out of trouble. The fund now boasts solid risk-adjusted returns over Galuzza’s tenure.

Learn more about these funds.
Vanguard Short-Term Inflation Protected Securities https://www.morningstar.com/funds/xna...
FPA New Income https://www.morningstar.com/funds/xna...
Fidelity Intermediate Bond https://www.morningstar.com/funds/xna...


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