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Government bond mutual funds are considered to be the safest class of investments in the bond fund category. These funds generally hold a portfolio of securities issued by the US Treasury and other government agencies which are backed by the full faith and credit of the US government. Yields from these instruments are typically low but the associated risk is also much smaller. In addition, many of these instruments are exempt from state and local taxes. By holding widely diversified portfolios of these investments, mutual funds contribute significantly to the safety associated with them.
Below we will share with you 5 top rated 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.
Rydex Government Long Bond 1.2x Strategy (RYGBX - MF report) seeks returns which are 120% of the price movement of U.S. long Treasury bonds. The majority of the funds assets are utilized to purchase U.S. government securities and derivatives. The government bond mutual fund returned 48.28% over the last one year period.
The Fund Manager is Donald T. Ellenberger and he has managed this government bond fund since 2005.
Wasatch-Hoisington US Treasury (WHOSX - MF report) invests at least 90% of its assets in U.S Treasury securities and repurchase agreements backed by such instruments. The fund also purchases long term U.S. Treasury Bonds, including zero coupon Treasury securities. The government bond mutual fund returned 46.23% over the last one year period.
The government bond mutual fund has a minimum initial investment of $2,000 and an expense ratio of 0.75% compared to a category average of 0.84%.
Federated US Government Bond seeks total return. The fund focuses on acquiring U.S. government securities as well as treasury securities and related derivatives. It also invests in mortgage-backed securities issued or backed by the U.S. government. The government bond mutual fund returned 18.99% over the last one year period.
As of October 2011, this government bond mutual fund held 19 issues, with 12.47% of its total assets invested in United States Treasury Note, 2.000%, 11/15/2021.
JPMorgan Government Bond A (OGGAX - MF report) utilizes a large share of its assets to purchase bonds issued by the U.S. Government and its agencies. The average weighted maturity period of its portfolio ranges between 3 to 15 years. The government bond mutual fund returned 11.04% over the last one year period.
The Fund Manager is Michael J. Sais and he has managed this government bond fund since 1996.
ISI Total Return US Treasury (TRUSX - MF report) seeks both capital growth and current income, which is a secondary objective. The fund invests the majority of its assets in U.S Treasury securities and repurchase agreements backed by such instruments. The government bond mutual fund returned 9.99% over the last one year period.
The government bond mutual fund has a minimum initial investment of $5,000 and an expense ratio of 0.84% compared to a category average of 0.99%.
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.