Some reader letters take you to unexpected places.

Last week a reader asked how he could establish a Couch Potato Portfolio using Fidelity Funds. The answer was that it was easy for equities. In its small arsenal of index funds, Fidelity has equivalents to both the Vanguard 500 Index Fund and the Vanguard Total Stock Market Fund.

Fido also has offers the U.S. Bond Index fund (ticker FBIDX) which is equivalent to the Vanguard Total Bond Index Fund. Unfortunately, while the minimum investment in Fidelity equity index funds is $10,000 to $15,000, the minimum investment in their U.S. Bond Index fund is a hefty $100,000.

When I called to ask why, a helpful service representative explained that it was an institutional fund. The only way to invest smaller amounts was through an IRA rollover account. The service representative then looked for similar funds offered by Fidelity or through its no transaction fee network of non-Fidelity funds. He suggested I think about Fidelity Total Bond fund, which is new, Janus Flexible Income, or Pimco Real Return.   Good funds. But managed and more expensive than Fidelity U.S. Bond Index.

You have to wonder. Why?   The majority of Fidelity funds require minimum investments of only $2,500. Most of their Spartan series funds require minimum investments of $10,000 or $15,000. In spite of that $100,000 minimum investment, however, only four Fidelity fixed income funds have more assets under management than their bond index fund.

They are:

•  The $7.2 billion Intermediate Bond Fund (ticker: FTHRX, minimum investment $2,500, expense ratio 0.63 percent, 4 stars from Morningstar);

•  The $6.6 billion Ginnie Mae Fund (ticker:FGNMX, minimum investment $2,500, expense ratio 0.60 percent, 4 stars from Morningstar);

•  The $5.8 billion Short Term Bond Fund (ticker: FSHBX, minimum investment $2,500, expense ratio 0.58 percent, 4 stars from Morningstar),

•  The $5.4 billion Investment Grade Bond Fund (ticker: FBNDX, minimum investment $2,500, expense ratio 0.66 percent, 4 stars from Morningstar).

Their U.S. Bond Index Fund, the fifth largest of their fixed income funds, has $5.1 billion in assets, an expense ratio of 0.31, and--- you guessed it--- 4 stars from Morningstar.

Fidelity has nothing to be ashamed about in their four large managed funds. All outperform most their competitive peers. Their expense ratios are nearly half the 1.11 percent average charged by other taxable bond funds.

A caution light goes on, however, when you compare the performance of Fido's four big winners to the performance of their fixed income index fund.   The Fidelity U.S. Bond Index Fund beat all four over the last 10 years.

It also beat them over the last 5 years.

And it beat them over the last 3 years.

Over the 12 months ending June 30, according to www.morningstar.com, U.S. Bond Index returned 10.86 percent, trailing Fidelity Investment Grade Bond by a meager 3 basis points. Investment Grade returned 10.89 percent. U.S. Bond Index fund beat the other three managed funds over the period.

Basically, the Fidelity bond index fund is better than any of their four largest managed funds.

But don't take my word on it. Go to www.morningstar.com , open their mutual funds section, and compare the five funds yourself. Enter the tickers for the five funds, select your judgment criteria, and learn which fund has the best overall score. (Answer: the index fund)

And that tells you why Fido has a $100,000 minimum on their fixed income index fund. Many of the Fidelity fund shareholders who make the same comparison would want to move their money to the better performing but less expensive fund. Billions of dollars could migrate from generating 0.6 percent a year for Fidelity to generating only 0.31 percent a year.

How much is that worth to Fidelity?

I put the additional revenue as high as $76 million a year. Not a minor sum. And all of it is coming straight out of shareholder pockets.

Query: if that's happening at Fidelity, with fund expenses nearly half the industry average and with superior performance, how much investor return is being wasted at the vast majority of the other 4,500 fixed income mutual funds?

Don't hold your breath waiting for them to tell you.