TLT vs. FLBIX

Discussion of the Bond portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
User avatar
foglifter
Executive Member
Executive Member
Posts: 634
Joined: Tue Apr 27, 2010 5:37 pm
Location: The Golden State

TLT vs. FLBIX

Post by foglifter » Fri Jun 18, 2010 5:45 pm

I understand that Fidelity L/T Treasury fund (FLBIX) has shorter duration than TLT and hence is less volatile. It's expense ratio is 0.20, which is just a tad bigger than TLT. Current yield is 3.88% for TLT and 3.85 for FLBIX.
However, I can't understand why StoctCharts shows such a huge lag in performance over the last 3 years:
http://stockcharts.com/charts/performan ... ?TLT,FLBIX

I thought the long-term returns should not differ too much. Can anyone shed some light?

Thanks!
"Let every man divide his money into three parts, and invest a third in land, a third in business, and a third let him keep in reserve."
- Talmud
User avatar
Jan Van
Executive Member
Executive Member
Posts: 717
Joined: Thu Jun 17, 2010 5:42 am
Location: Charlotte, NC

Re: TLT vs. FLBIX

Post by Jan Van » Mon Jun 28, 2010 4:05 pm

Morningstar 3yr performance:
fblix: 10.30%
TLT:  9.93%

Not that huge?

http://performance.morningstar.com/fund ... ture=en-US
"Well, if you're gonna sin you might as well be original" -- Mike "The Cool-Person"
"Yeah, well, that’s just, like, your opinion, man" -- The Dude
User avatar
foglifter
Executive Member
Executive Member
Posts: 634
Joined: Tue Apr 27, 2010 5:37 pm
Location: The Golden State

Re: TLT vs. FLBIX

Post by foglifter » Mon Jun 28, 2010 5:23 pm

jmourik wrote: Morningstar 3yr performance:
fblix: 10.30%
TLT:  9.93%

Not that huge?

http://performance.morningstar.com/fund ... ture=en-US
As to your note regarding 3yr performance: I'm not sure if 3 years is a long enough period to draw conclusions, it could be data mining issue, i.e. during these 3 years FLBIX happened to carry more bonds with higher yield. If you look at the chart below, TLT outperformed in 2007 and 2008 and lagged in 2009, so it really might be just noise. Hopefully local experts will jump in with explanation.

Image
"Let every man divide his money into three parts, and invest a third in land, a third in business, and a third let him keep in reserve."
- Talmud
User avatar
foglifter
Executive Member
Executive Member
Posts: 634
Joined: Tue Apr 27, 2010 5:37 pm
Location: The Golden State

Re: TLT vs. FLBIX

Post by foglifter » Mon Jun 28, 2010 5:28 pm

I posted my question at the BH forum and got it answered - it turned out StockCharts charts were incorrect. :D
"Let every man divide his money into three parts, and invest a third in land, a third in business, and a third let him keep in reserve."
- Talmud
User avatar
craigr
Administrator
Administrator
Posts: 2540
Joined: Sun Apr 25, 2010 9:26 pm

Re: TLT vs. FLBIX

Post by craigr » Mon Jun 28, 2010 5:59 pm

I have no explanation for the fund return differences. Could be many things. The benefit of owning the bonds directly is that you don't need to worry about how a fund is being managed behind the scenes. But if that is not an option, then TLT and probably FLBIX are about as good as you can find out there.
Post Reply