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Top 5 Highest Yielding Government Bond Mutual Funds
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ShareFor investors looking at parking their funds with bonds, U.S. government securities are probably the safest possible investments in the category. Default risk is almost non-existent in this case, thought the trade-off is that the yields on such instruments are consequentially lower, a price for the quality of the investments. Moreover, interest payments on many treasury securities are exempt from local and state taxes. Consequentially, mutual funds holding government securities are the safest bond funds and a natural choice for the risk averse.
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, then click here.
| Mutual Fund | Sec Yield |
| Fidelity Spartan Long-Term Treasury Bond Index | 4.05% |
| T. Rowe Price US Treasury Long Term | 3.77% |
| Vanguard Long-Term Treasury Investor | 3.42% |
| Transamerica Partners IPS | 3.1% |
| Rydex Government Long Bond 1.2 X Strategy | 2.92% |
Fidelity Spartan Long-Term Treasury Bond Index (FLBIX) seeks high current income. The fund invests at least 80% of its assets in securities which are part of the Barclays Capital U.S. Long Treasury Bond index. The government bond mutual fund returned 17.22% over the last one year period.
The Fund Manager is Curt Hollingsworth and he has managed this government bond fund since 2009.
T. Rowe Price US Treasury Long-Term (PRULX) invests at least 85% of its assets in U.S Treasury securities. The balances of its funds are used to purchase other securities issued by the U.S. government. The average weighted maturity generally ranges from 15 and 20 years, but may range from 10 to 30 years. The government bond mutual fund has a five year annualized return of 8.52%.
As of September 2011, this government bond mutual fund held 86 issues, with 9.10% of its total assets invested in US Treasury Bond 4.625%.
Vanguard Long-Term Treasury Investor (VUSTX) seeks high current income. The fund utilizes at least 80% of its assets to purchase securities issued by the U.S. Treasury, including bills, bond and notes. The average maturity period of the portfolio varies between 15 to 30 years. The government bond mutual fund returned 16.81% over the last one year period.
The government bond mutual fund has a minimum initial investment of $3,000 and an expense ratio of 0.22% compared to a category average of 0.84%.
Transamerica Partners IPS (DVIGX) invests the majority of its assets in inflation-protected securities and related investments. The fund utilizes an underlying mutual fund to purchase these securities which are instruments issued by the U.S. government and its agencies. The government bond mutual fund has a three year annualized return of 11.2%.
Martin Hegarty is the fund manager and has managed this government bond mutual fund since 2010.
Rydex Government Long Bond 1.2x Strategy (RYGBX) seeks returns which are 120% of the price movement of U.S. long Treasury bonds. The majority of the fund’s assets are utilized to purchase U.S. government securities. The government bond mutual fund has a ten year annualized return of 4.83%.
The government bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.98% compared to a category average of 0.84%.
To view the Zacks Rank and past performance of all government 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.
Read the full analyst report on FLBIX
Read the full analyst report on PRULX
Read the full analyst report on VUSTX
Read the full analyst report on DVIGX
Read the full analyst report on RYGBX
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| Market Summary | May 26, 2012 17:58 pm ET |
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