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Bonds are the logical choice of investors who are willing to forgo capital growth for a regular income stream. The cost of individually purchasing bonds from various categories may become a particularly expensive proposition. This is why mutual funds are the most affordable method of investing in bonds. Diversified bond mutual funds further reduce the risk involved since their portfolios consist of securities from various classes and sectors. This ensures that any negative fluctuation in a specific sector only has a partial effect on the fund’s fortunes.
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.
Lord Abbett Core Fixed Income A (LCRAX - MF report) seeks capital growth and current income. The fund invests the majority of its assets in debt securities of different kinds. It seeks to acquire U.S. government securities, investment grade domestic and foreign securities, asset backed instruments, senior loans and derivatives. The diversified bond mutual fund returned 4.96% in the last one year period.
The diversified bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.88% compared to a category average of 0.93%.
Delaware Pooled Core Plus Fixed Income (DCPFX - MF report) invests in three categories of debt securities. These include domestic investment grade bonds, domestic high yield bonds and foreign securities. The fund purchase securities denominated in any currency .The diversified bond mutual fund has a five year annualized return of 7.88%.
Paul Grillo is the fund manager and has managed this diversified bond mutual fund since 2002.
Vanguard Long-Term Bond Index (VBLTX - MF report) seeks to mimic the performance of the Barclays Capital U.S. Long Government/Credit Float Adjusted Index. The fund of invests a large proportion its assets in bonds which are included in the Barclays Capital U.S. Long Government/Credit Float Adjusted Index. The diversified bond mutual fund has a ten year annualized return of 8.14%.
As of September 2011, this diversified bond mutual fund held 1169 issues, with 4.31% of its total assets invested in US Treasury Bond 4.375%.
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 4.58%.
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 0.90%.
RidgeWorth Total Return Bond A (CBPSX - MF report) 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 6.2% 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.