I was hoping to find the Fixed Income Analysis tool on Fidelity to have more value. At first review, it shows all your Bonds, CD's etc in one view and it shows current price/value and market Yields on what you own.
What is miss leading and missing is your cost basis and actual yield to maturity. It is really a dangerous tool if you do not understand its purpose. It shows the estimated yields for your holdings if you bought them today, which is far from what they really will yield to maturity and even less if you sold them today. I was hoping for better visibility of our holdings.
In the cash flow calculation tab, it shows Average Maturity and Estimated yield. I was feeling pretty good until I did my own calculations and found my Average Maturity was much higher and Estimated net yield to Maturity very much lower. This is all because they do not use your Basis, but the market Ask price instead. Basically, it is worthless unless you use it to buy more of the same.
Fortunately, I do understand this for what it is, but it is really misleading for those who can not read the fine print and basis of their calcs. I actually am quite that this could be misleading.
Another issue is the purchase of zero coupon treasuries. Fidelity shows the YTM higher than if you do the math. They claim the new issue I bought would yield 1.47% on the confirmation, but doing the math on actual days held my yield is 1.37%. Not a lot of difference, but certainly larger than expected. On some CD's and Bonds this is not the case, but all my recent t-bills and notes are off some fraction of percent.
So I am looking for better tools and hoping I do not have to reinvent a spread sheet to better manage bonds. In this rising rate time, its hard to know when to go out for longer duration, and its clearly a loss to sell bonds before maturity in most cases, but not all.
What is miss leading and missing is your cost basis and actual yield to maturity. It is really a dangerous tool if you do not understand its purpose. It shows the estimated yields for your holdings if you bought them today, which is far from what they really will yield to maturity and even less if you sold them today. I was hoping for better visibility of our holdings.
In the cash flow calculation tab, it shows Average Maturity and Estimated yield. I was feeling pretty good until I did my own calculations and found my Average Maturity was much higher and Estimated net yield to Maturity very much lower. This is all because they do not use your Basis, but the market Ask price instead. Basically, it is worthless unless you use it to buy more of the same.
Fortunately, I do understand this for what it is, but it is really misleading for those who can not read the fine print and basis of their calcs. I actually am quite that this could be misleading.
Another issue is the purchase of zero coupon treasuries. Fidelity shows the YTM higher than if you do the math. They claim the new issue I bought would yield 1.47% on the confirmation, but doing the math on actual days held my yield is 1.37%. Not a lot of difference, but certainly larger than expected. On some CD's and Bonds this is not the case, but all my recent t-bills and notes are off some fraction of percent.
So I am looking for better tools and hoping I do not have to reinvent a spread sheet to better manage bonds. In this rising rate time, its hard to know when to go out for longer duration, and its clearly a loss to sell bonds before maturity in most cases, but not all.