7
Morningstar FundInvestor
July 2
014
Morningstar Analyst Rating
06-06-14
Œ
Morningstar Pillars
Process
Performance
People
Parent
Price
Positive
Positive
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
10.74
10.44
10.95
10.92
10.72
10.47
9.20
10.33
10.45
10.42
10.63
10.52
Total Return %
4.34
-0.92
6.51
7.40
8.55
19.80
-5.56
4.13
5.15
2.46
5.47
5.87
+/-BC Agg Bnd
0.41
1.10
2.30
-0.44
2.01
13.87
-10.80
-2.84
0.82
0.03
1.13
1.77
+/-BC Agg Bnd
0.41
1.10
2.30
-0.44
2.01
13.87
-10.80
-2.84
0.82
0.03
1.13
1.77
Income Return %
1.45
2.78
2.97
3.82
4.15
5.34
5.03
5.07
4.62
4.10
3.52
3.02
Capital Return %
2.89
-3.70
3.54
3.58
4.40
14.46
-10.59
-0.94
0.53
-1.64
1.95
2.85
Total Rtn % Rank Cat
39
28
53
18
29
15
57
73
13
16
7
26
Income $
0.15
0.30
0.32
0.40
0.42
0.48
0.51
0.52
0.47
0.43
0.36
0.31
Capital Gains $
0.00
0.11
0.36
0.18
0.21
0.03
0.07
0.03
0.02
0.04
0.09
0.06
Expense Ratio %
.
0.45
0.45
0.45
0.45
0.45
0.45
0.45
0.45
0.61
0.65
0.65
Income Ratio %
.
2.75
3.29
3.89
4.37
5.52
5.12
5.25
4.95
3.87
3.25
2.77
Turnover Rate %
.
201
155
168
130
104
122
116
99
193
.
336
Net Assets $mil
13,902
11,611
12,894
11,937
10,956
11,443
8,280
9,221
3,003
497
366
300
Performance
06-30-14
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2010
2011
2012
2013
2014
2.55 2.76
3.29 -0.28
8.55
1.08 2.18
2.16 1.78
7.40
1.26 2.20
2.33 0.58
6.51
0.30 -2.50
0.84 0.47 -0.92
2.17
. . . .
Trailing
Total
+/- BC
+/- BC %Rank Growth of
Return% Agg Bnd Agg Bnd
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
2.12 0.08
0.08
47 10,212
4.34 0.41
0.41
39 10,434
5.71 1.34
1.34
33 10,571
4.61 0.95
0.95
31 11,448
6.88 2.03
2.03
26 13,947
5.53 0.60
0.60
20 17,130
. . . . .
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
2.93
36
1.61
88
5.10
30
1.66
84
3.74
24
1.70
82
Potential Capital Gain Exposure: 3% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
5.71
3 Yr
4.61
+Avg
Avg
5 Yr
6.88
+Avg
Avg
10 Yr
5.53
+Avg
+Avg
Incept
5.55
Other Measures
Standard Index
Best Fit Index
BC Agg Bnd
BC US Universal
Alpha
1.0
0.1
Beta
0.97
1.06
R-Squared
86
97
Standard Deviation
2.92
Mean
4.61
Sharpe Ratio
1.54
Morningstar’s Take
by Sarah Bush 06-06-14
Fidelity Total Bond puts its family s many resources to
good use.
One of several Fidelity entrants in the
intermediate-term bond category, this fund
distinguishes itself with its relatively wide-ranging
mandate. Manager Ford O’Neil keeps the fund s
duration close to that of its Barclays U.S. Aggregate
Bond benchmark but is more adventurous when it
comes to credit risk. The fund has the flexibility to buy
emerging-markets bonds and can invest up to 20% in
below-investment-grade debt. (This represents a slight
widening of the fund s investment universe; prior to
mid-2013, the fund was limited to a combined 20%
stake in high-yield and emerging-markets fare.)
This flexibility is in good hands. For starters, O Neil,
a Fidelity veteran, draws on the firm s deep bench of
managers and analysts, including its well-respected
government and high-yield teams, for input on
valuations and security selection. O Neil has a solid
track record of adjusting the fund s sector weightings.
For example, he took advantage of 2008 s credit crisis
to build a nearly 20% combined stake in battered
emerging-markets and junk bonds and the fund roared
back in 2009. He then trimmed risk enough to miss the
worst of 2011 s rocky third quarter.
As of spring 2014, O Neil argued that credit offered
the best opportunity in what he viewed as a richly
priced fixed-income market. As a result, the fund
looked aggressive by historical standards, featuring an
overweighting to corporates (33% as of April 2014)
relative to the benchmark, including a 13% stake in
high yield; emerging markets accounted for another
5%. Meanwhile O Neil was particularly cautious on
agency mortgages, which at 19% represent a sizable
underweighting relative to the index.
The fund s taste for credit risk leaves it vulnerable
to losses when the economy slows or markets
experience a flight to quality. However, over time
shareholders have been well-rewarded: The fund s
5.6% annualized gain over O Neil s 14-year tenure
outpaces 75% of its peers. Add in a cheap price tag
and it earns a Morningstar Analyst Rating of Gold.
Address:
Fidelity Income Fund
Boston, MA 02109
800-544-8544
Web Address:
advisor.fidelity.com
Inception:
10-15-02
Advisor:
Fidelity Management & Research Company
Subadvisor:
FMR Co., Inc. (FMRC)
NTF Plans:
Fidelity Retail-NTF, CommonWealth NTF
Minimum Purchase:
$2500
Add: $0 IRA: $2500
Min Auto Inv Plan:
$2500
Add:
.
Sales Fees:
No-load
Management Fee:
0.31%
Actual Fees:
Mgt:0.31% Dist:
.
Expense Projections:
3Yr:$144
5Yr:$252 10Yr:$567
Income Distribution:
Monthly
Data through June 30, 2014
Fidelity Total Bond
Ticker Status Yield SEC Yield Total Assets Mstar Category
FTBFX Open 2.9% 2.44% $15,127 mil
Intermediate-Term Bond
36
27
34
31
33
28
44
34
31
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 06-14
Historical Profile
Return
Risk
Rating
Above Avg
Above Avg
Above Avg
Investment Style
Fixed Income
Income Rtn %Rank Cat
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
BC Agg Bnd
Performance Quartile
(within Category)
History
10.0
12.0
14.0
16.0
18.0
Portfolio Analysis
05-31-14
Date of
Amount
Value % Net
Total Fixed-Income:1052
Maturity
$000
$000 Assets
US Treasury Note 1.25%
10-31-18 786,376 776,669 5.82
US Treasury Note 2.25%
03-31-21 473,646 474,497 3.56
US Treasury Note 2.75%
02-15-24 451,742 455,483 3.42
Fidelity Cent Invt Portf
3,988 431,811 3.24
Fannie Mae 3% 30 Year
366,300 357,613 2.68
Fannie Mae 4% 30 Year
336,184 352,512 2.64
Fannie Mae 3.5% 30 Year
338,733 342,392 2.57
US Treasury Note 1.5%
01-31-19 321,637 319,878 2.40
US Treasury Note 1.375%
07-31-18 302,602 301,845 2.26
US Treasury Note 1.625%
03-31-19 276,810 276,291 2.07
US Treasury Note 0.875%
04-30-17 203,188 203,188 1.52
US Treasury Note 1.375%
09-30-18 203,561 202,432 1.52
US Treasury Note 0.875%
01-31-18 192,574 190,046 1.42
US Treasury Note 0.75%
02-28-18 178,380 174,938 1.31
US Treasury Bond 3.625%
02-15-44 147,770 152,111 1.14
US Treasury Note 1%
05-31-18 123,485 121,671 0.91
Verizon Comms 6.55%
09-15-43 98,171 120,935 0.91
GNMA 3.5%
113,195 116,589 0.87
GNMA 4.5%
98,188 107,026 0.80
Fannie Mae 4.5% 30 Year
98,605 106,275 0.80
Current Investment Style
1
1
Avg Eff Duration
5.1 Yrs
Avg Eff Maturity
.
Avg Credit Quality
BBB
Avg Wtd Coupon
3.54%
Avg Wtd Price
112.43% of par
figure provided
by fund
Duration
Ltd Mod Ext
Quality
High
Med Low
Special Securities
Restricted/Illiquid Secs
7
Exotic Mortgage-Backed
0
Emerging-Markets Secs
5
Options/Futures/Warrants
No
Credit Analysis
% bonds 05-31-14
AAA
57
AA
2
A
12
BBB
18
BB
4
B
4
Below B 1
NR/NA 0
Sector Breakdown
% of assets
US Treasury
33
Non US Government
2
Government Related
4
Corporate
30
Agency MBS Pass-Through 11
Agency MBS ARM
0
Agency MBS CMO
2
Non-Agency Residential MBS 3
Commercial MBS
4
Asset-Backed
1
Municipal
2
Cash & Equivalents
8
Other
0
Composition - Net
Cash
6.3
Bonds 90.5
Stocks 0.0
Other
3.3
Coupon Range
% of Bonds Rel Cat
1.00=Category Average
0% PIK
0.1 0.0
0% to 6%
88.9 1.1
6% to 8%
9.6 0.8
8% to 10%
1.1 0.4
More than 10%
0.2 0.4
©
2014Morningstar, Inc.All rights reserved. The information herein isnot representedorwarranted tobe accurate, correct, completeor
timely.Pastperformance isnoguaranteeof future results.Accessupdated reports at
To order reprints, call 312-696-6100.
mfb.morningstar.com.
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