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Diversified bond funds provide investors with a convenient and affordable option to hold a portfolio of bonds from different economic sectors. The costs incurred to create a portfolio of individual bonds would be significantly higher than investing in this class of funds. The associated risk also undergoes a decline since volatility in a specific sector has only a partial effect on the fund’s fortunes. The opportunity to reinvest the income generated and a relatively higher level of liquidity also make them secure and attractive investments.
Below we will share with you 5 top rated diversified 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 diversified bond funds, then click here.
JPMorgan Core Bond A ( PGBOX - MF report ) seeks capital growth and current income. The fund invests the majority of its assets in debt securities with intermediate to long term maturity periods. The average weighted maturity period of the fund’s portfolio varies between four to twelve years. The diversified bond mutual fund returned 5.06% in the last one year period.
The diversified bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.74% compared to a category average of 0.93%.
Vanguard Total Bond Market Index ( VBMFX - MF report ) invests a large proportion its assets in bonds which are included in the Barclays Capital U.S. Aggregate Float Adjusted Index. The fund has an average dollar-weighted maturity period which varies between five to ten years. The diversified bond mutual fund has a ten year annualized return of 5.73%.
Kenneth Volpert is the fund manager and has managed this diversified bond mutual fund since 1992.
Delaware Optimum Fixed Income A ( OAFIX - MF report ) seeks capital appreciation and income. The fund invests at least 80% of its assets in fixed-income securities. It purchases a wide range of government securities, corporate debt, municipal and asset-backed securities. The diversified bond mutual fund returned 5.59% in the last one year period.
As of March 2011, this diversified bond mutual fund held 1150 issues, with 3.93% of its total assets invested in US Treasury Note 2.25%.
Fidelity Strategic Real Return ( FSRRX - MF report ) invests in four different types of instruments: Inflation protected debt securities, commodity-linked notes, floating rate loans and real estate investment trusts. The diversified bond mutual fund has a three year annualized return of 4.3%.
The diversified bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.73% compared to a category average of 0.93%.
RidgeWorth Total Return Bond A (CBPSX) seeks total return higher than that provided by the domestic investment grade bond sector. The fund purchases securities rated investment grade by at least one domestic securities rating firm. The diversified bond mutual fund returned 4.12% in the last one year period.
Adrien Webb is the fund manager and he has managed this diversified bond mutual fund since 2002.
To view the Zacks Rank and past performance of all diversified bond mutual funds, then click here.
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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