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Highest Yielding Zacks #1 Ranked Funds

Investing in international bond funds is one of the best ways to balance losses incurred from US markets, since interest rate fluctuations differ from country to country. This is because they show little correlation with domestic equities and only moderate correlation with investment grade domestic debt. They also help in diversifying currency exposure and protecting assets against a long-term secular decline in the U.S. dollar. With their widely diversified holdings, mutual funds offer a secure route to investing in the international bond market.

Below we will share with you the 5 highest yielding Zacks #1 ranked international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all international bond funds, investors can click here to see the complete list of funds.

Mutual Fund

Sec 30 Day Yield

Franklin Templeton Emerging Market Debt Opportunities

5.35%

GMO Emerging Country Debt IV

5.11%

PIMCO Emerging Local Bond A

2.7%

GMO Currency Hedged International Bond III

1.24%

PIMCO Developing Local Mkts

0.55%

 

Franklin Templeton Emerging Market Debt Opportunities (FEMDX - MF report) seeks appreciably high total return. The fund invests the majority of its assets in emerging market debt securities. It may invest substantially all of its assets in debt securities rated below investment grade. The international bond mutual fund returned 8.12% in the last one year period.

The international bond mutual fund has an expense ratio of 1.00% compared to a category average of 1.25%.

GMO Emerging Country Debt IV (GMDFX - MF report) invests in to attain returns higher than J.P. Morgan EMBI Global’s benchmark. To achieve these returns, the fund invests in external sovereign and quasi sovereign debt instruments issued by emerging counties. The international bond mutual fund returned 9.53% in the last one year period.

As of February 2013, this international bond mutual fund held 167 issues, with 5.53% of its total assets invested in Bolivarian Republic Venezuela 11.95%

PIMCO Emerging Local Bond A (PEBLX - MF report) invests a large proportion of its assets in fixed income securities, inclusive of derivatives, denominated in currencies, including those issued from emerging markets. Although, all the assets can be invested in the fixed income instruments, not more than 15% is invested in securities holding ratings below B. The international bond mutual fund returned -2.26% in the last one year period.

The Fund Manager is Michael A. Gomez and he has managed this international bond mutual fund since 2006.

GMO Currency Hedged international Bond III (GMHBX - MF report) invests a large proportion of its assets in bonds. The fund focuses on attaining returns higher than the J.P. Morgan Non-U.S. Government Bond (Hedged) (ex-Japan) Index. The international bond mutual fund is non-diversified and has returned 7.28% in the last one year period.

The international bond mutual fund has an expense ratio of 0.40% compared to a category average of 1.10%.

PIMCO Developing Local Markets (PLMAX - MF report) seeks total return along with capital preservation. A majority of assets is invested in fixed income instruments including those issued from emerging markets. Fixed instrument can also be in the form derivatives. The international bond mutual fund returned 1.12% in the last one year period.

The Fund Manager is Michael A. Gomez and he has managed this international bond mutual fund since 2005.

To view the Zacks Rank and past performance of all international bond mutual funds, investors can click here to see the complete list of funds.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.

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