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I’m pretty heavily invested in PTTRX in my 401k at work and see it is bleeding badly this year.
Since Fidelity runs our 401k program, I noticed FFFAX is offered and doing decent - wonder if it may be worth it to transfer some funds over. I don't know much about the fund and figure this is the place to find out.
The two funds you mention are in different categories - they invest in somewhat different asset classes. So the first question is: Are you concerned about having too much allocated to bonds, or the particular funds' performance?
Realistically, in most years, there isn't a heck of a lot of difference between a top quintile intermediate term bond fund and a bottom quintile fund. Maybe a couple of percent or so. Consequently, even though PTTRX's performance this year hasn't been great, it hasn't exactly fallen through the floor, either.
Fidelity's target maturity funds haven't really measured up to those in other families, for a variety of reasons - too many mediocre funds used, choice of glide path, etc. In any case, FFFAX generally underperforms its category, though here too, its performance is pretty much in line with what you'd expect. It is a fund that has settled in to its final allocation ratios (80/20 bonds/stocks - what someone retired for many years might hold in a portfolio).
The average large cap blend fund YTD performance is about 17%, and the average intermediate term bond fund is down about 3%. Blend these in an 80/20 mix (bonds/stocks), and one gets an expected YTD performance around 1%. That's the ballpark in which we find FFFAX.
In these categories (intermediate term bond, target date: retirement), there's often not a huge difference among the funds (excluding the random outliers). And that's what you're seeing here. Neither fund is doing well within its category, but (to quote Data from STNNG), they're functioning within normal parameters.
If you are thinking about changing your portfolio asset allocations, that's a different question. I would not be inclined to use a target retirement fund to shift out of bonds - the shift is too slight (moving from 100% bonds to 80% bonds), and the difference you're seeing in short term performance is because there's such a huge difference between how stocks and bonds have done this year. On average, you'd expect a difference of only a couple of percent, and when you scale that down by a factor of 5 (because only 1/5 of these funds are in stocks), such a change doesn't seem worth making.
So you might think about shifting to equity funds, or at least balanced funds (60/40 stocks/bonds), rather than shifting from a bond fund to one that is still 80% in bonds.
Comments
Realistically, in most years, there isn't a heck of a lot of difference between a top quintile intermediate term bond fund and a bottom quintile fund. Maybe a couple of percent or so. Consequently, even though PTTRX's performance this year hasn't been great, it hasn't exactly fallen through the floor, either.
Fidelity's target maturity funds haven't really measured up to those in other families, for a variety of reasons - too many mediocre funds used, choice of glide path, etc. In any case, FFFAX generally underperforms its category, though here too, its performance is pretty much in line with what you'd expect. It is a fund that has settled in to its final allocation ratios (80/20 bonds/stocks - what someone retired for many years might hold in a portfolio).
The average large cap blend fund YTD performance is about 17%, and the average intermediate term bond fund is down about 3%. Blend these in an 80/20 mix (bonds/stocks), and one gets an expected YTD performance around 1%. That's the ballpark in which we find FFFAX.
In these categories (intermediate term bond, target date: retirement), there's often not a huge difference among the funds (excluding the random outliers). And that's what you're seeing here. Neither fund is doing well within its category, but (to quote Data from STNNG), they're functioning within normal parameters.
If you are thinking about changing your portfolio asset allocations, that's a different question. I would not be inclined to use a target retirement fund to shift out of bonds - the shift is too slight (moving from 100% bonds to 80% bonds), and the difference you're seeing in short term performance is because there's such a huge difference between how stocks and bonds have done this year. On average, you'd expect a difference of only a couple of percent, and when you scale that down by a factor of 5 (because only 1/5 of these funds are in stocks), such a change doesn't seem worth making.
So you might think about shifting to equity funds, or at least balanced funds (60/40 stocks/bonds), rather than shifting from a bond fund to one that is still 80% in bonds.