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Mutual Fund Commentary

Mutual funds investing in debt securities are among the most secure investment options which provide regular income while protecting capital invested. Funds which are part of this category bring a great deal of stability to portfolio which a large proportion of equity, while providing dividends more frequently than individual bonds. U.S government bonds funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor.

Below we will share with you the 5 highest yielding Zacks #1 ranked government 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 government bond funds, investors can click here to see the complete list of funds.
 

Mutual Fund Sec 30 Day Yield
Lord Abbett Floating Rate A 4.09%
Driehaus Select Credit 3.68%
Driehaus Active Income 3.24%
Sentinel Total Return Bond A 2.83%
Lord Abbett Short Duration Income A 2.43%
 

Lord Abbett Floating Rate A (LFRAX - MF report) invests a majority of its net assets in in senior loans which carry an adjustable or floating rate. A maximum of 20% of its assets are invested in unsecured senior loans. At least 20% is also invested in different types of debt and short term securities. Derivatives attract investment of not more than 10% of its total assets. The government bond mutual fund returned 8.41% over the last one year period.

The government bond mutual fund has expense ratio of 0.81% compared to a category average of 1.13%.

Driehaus Select Credit (DRSLX - MF report) seeks income in different market conditions. A majority of investment is made in U.S. floating rate and fixed income securities. Investments can be made in investment grade bonds and junk bonds. The government bond mutual fund returned 7.76% over the last one year period.

As of July 2013, this government bond mutual fund held 121 issues, with 3.15% of its total assets invested in Graton Econ Dev Auth 144A 9.625%.

Driehaus Active Income (LCMAX - MF report) invests in U.S. floating rate and fixed income securities. Investments can be made in investment grade bonds and junk bonds. The government bond mutual fund returned 5.44% over the last one year period.

The Fund Manager is K.C. Nelson and he has managed this government bond fund since 2009.

Sentinel Total Return Bond A (SATRX - MF report) seeks high return from a combination of capital growth and current income. The fund invests predominantly in different kind of fixed-income securities regardless of its duration. Half of its assets may be invested in junk bonds. The government bond mutual fund returned 2.95% over the last one year period.

The government bond mutual fund has an expense ratio of 0.95% compared to a category average of 0.90%.

Lord Abbett Short Duration Income A (LALDX - MF report) invests a minimum of 65% of its assets in different kind of investment grade debt securities including the ones which are backed by the U.S. Government or government sponsored securities. The government bond mutual fund returned 2.92% over the last one year period.

The Fund Manager is Andrew A. O'Brien and he has managed this government bond fund since 1998.

To view the Zacks Rank and past performance of all government 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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