Prospectus Supplement, Dec 1, effective Dec 6Monthly Fact SheetMax average maturity - Was 0.75 years, now 1 year max (as of 11/30/23 actual avg maturity is 0.53 years)
Max security maturity - Was 2 years (3 years for floating rate securities), now 4 years
Max pct invested in lower quality IG securities - Was 5%, now unlimited (possibly subject to the 20% restriction for investing outside of its "normal" investment)
Judging from the 10/31/23 composition of the portfolio (28% A rated, 6% BBB rated), it looks like "lower quality IG securities" means BBB, while A-rated securities are considered higher quality.
Comments
”The team (that manages TRRIX) has made several changes to the underlying holdings over the past several years, adding both T. Rowe Price Hedged Equity PHEFX and T. Rowe Price Dynamic Credit RPELX to the portfolio in 2023. Both strategies add an element of volatility hedging and dynamic risk adjustment to their respective asset classes. Although hedging won’t necessarily improve the portfolio’s average risk-adjusted return, the hedges may cushion losses and reduce the maximum drawdown during bear markets, in exchange for reducing the potential upside.”( Excerpted from Morningstar)
@msf has referenced a Fidelity income fund. While TRRIX now calls itself a “balanced (40/60) fund” that was not always the case. At inception about 20-25 years ago it eas actually called the: “T. Rowe Price Retirement Income Fund”.
TRRIX suffered double digit losses in 2022. That’s a lot for this fund. Glad TRP is tweaking. Perhaps they should have been quicker on the stick. YTD the fund is up +7.8%. That’s still a long way from making up for last year’s loss.
I will monitor this change because my complaint with Vanguard ultra-ST OEFs and ETFs has been that they have higher duration or maturity in the ultra-ST group.
All info as of 10/31 -
Country diversification shows less than 50% invested in US issuers but 100% USD. Corporate is 72+%. As it relates to banking, financial services and insurance, I could not equate sector diversification info to corporate sector diversification info (78% of 72%?). May be somebody else can weigh in.
https://fundresearch.fidelity.com/mutual-funds/composition/316146521
P.S.: Very strange that Fidelity charges 0.4+% ER for a treasury money market fund. Talk about printing money. May be time to switch to a short or ultra short Treasury ETF. I own USFR but would also like a non-floating rate ETF. Any suggestions?
SWVXX has a current 7 day yield of 5.26%
New issue Treasuries (1,3,6 month) expected yields between 5.28% and 5.34% (from Fidelity)
In taxable accounts they have two advantages:
- state income tax exemption (a 5% fully taxable yield can be reduced to as little as 4.5% in a high income tax state);
- tax deferral.
Taxes on investments maturing in 12 months or less (such as T-bills) are not due until maturity. Purchase a T-bill (or short term CD) now, and taxes won't be incurred until 2024 and not due until April 2025.
It's all about how much effort is needed for how much extra gain. The amount of extra gain is shrinking.
FSIXX with a 0.18% ER after waivers has a current 7 day yield of 5.24% and can be purchased at Merrill (NTF) with a $1K min
https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/ICCRateSheet.pdf
Interesting that FSIXX does not offer for such a low minimum at Fidelity. I try to keep the cash equivalents at Fidelity or TD.
For tax defer accounts, there are many more options including those mentioned here.