Fund Spy

An Upgrade for This Cost-Conscious, Conservative Bond Fund

Alex Bryan, CFA
The following is our latest Fund Analyst Report for Fidelity U.S. Bond Index (FXNAX). Morningstar Premium Members have access to full analyst reports such as this for more than 1,000 of the largest and best mutual funds. Not a Premium Member? Gain full access to our analyst reports and advanced tools immediately when you try Morningstar Premium free for 14 days.

Fidelity U.S. Bond Index is a compelling core bond strategy. It is one of the cheapest investment-grade bond funds available. While its index-tracking performance hasn't been quite as strong as some of its index peers, its sizable cost advantage and conservative credit risk should serve investors well over the long term. It warrants a Morningstar Analyst Rating upgrade to Silver from Bronze.

The fund tracks the market-value-weighted Bloomberg Barclays U.S. Aggregate Bond Index, which includes U.S.-dollar-denominated bonds with at least one year until maturity. Market-value-weighting allows the fund to harness the market's collective wisdom about the relative value of each holding. It also keeps transaction costs low by mitigating turnover and tilting the portfolio toward the largest debt issues, which tend to be the cheapest to trade.

Alex Bryan, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.