Top Diversified Bond Funds

Today we are featuring top-performing "Diversified Bond" fixed-income mutual funds, which primarily invest in a variety of bonds that pursue total return as well as income.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Diversified Bond Fixed-Income Funds.

3 Solid Choices

PIMCO Fundamental Advantage Total Return A (PTFAX) was founded in November 1999 and seeks total return consisting of current income and capital appreciation.

The fund primarily invests in debt obligations issued or guaranteed by the U.S. government and its agencies. It also invests in debt obligations issued by U.S. companies, foreign companies and foreign governments and their agencies.

William H Gross has been managing the fund since February 29, 2008. Gross is a designated Chartered Financial Analyst. He has also been recognized as an influential authority on the US bond market in a survey by Pensions and Investments Magazine conducted in 1993.

The fund has an expense ratio of 2.89%. It declares dividends daily and pays it monthly. Capital gains are distributed annually.

Delaware Extended Duration Bond A (DEEAX) seeks to generate total return through a combination of income and capital appreciation.

The fund, which was founded in September 1998, typically invests in US corporate bonds that have investment grade credit ratings in the four highest categories. The fund may invest up to 15% of it's assets in foreign corporate and government securities.

Roger A Early has been lead manager of the fund since May 24, 2007. He has had two stints with Delaware Investments, from 1994 to 2001 and from 2007 to the present. He quit Delaware as the head of its US Investment Grade Fixed Income Group, but has since rejoined the company as a member of the taxable fixed income portfolio management team.

The fund offers dividends monthly and capital gains in November. As of April 30, 2009, the portfolio turnover was 442%.

Frontegra Columbus Core Plus (FRTRX) seeks a high level of total return, consistent with the preservation of capital. It typically invests in investment-grade bonds of varying maturities.

Typically, the fund invests 80% of its assets in bonds of varying maturities. While the fund primarily focuses on investment grade fixed income securities, it may invest up to 25% of its assets in non investment grade fixed income securities. The fund looks for securities that it believes are undervalued in the fixed income market.

The fund distributes dividends quarterly and capital gains annually. As of March 31, 2009, its portfolio turnover was 1093%.

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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.

Read the full analyst report on PTFAX

Read the full analyst report on DEEAX

Read the full analyst report on FRTRX