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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, investors can click here to see the complete list of funds.
Thornburg Strategic Income A (TSIAX - MF report) invests in a wide range of income generating securities. The fund focuses on acquiring debt securities issued from across the world. These may be of differing quality and have different maturity periods. The diversified bond mutual fund returned 3.06% in the last one year period.
The diversified bond mutual fund has an expense ratio of 1.20% compared to a category average of 1.12%.
Hartford Strategic Income A (HSNAX - MF report) seeks total return over the long term as well as current income. The fund purchases both domestic and foreign debt securities, including those issued from emerging markets. It usually holds a wide range of instruments across different sectors. The diversified bond mutual fund returned 6.2% in the last one year period.
As of March 2012, this diversified bond mutual fund held 222 issues, with 3.69% of its total assets invested in U.S. Treasury Bond 5.375%.
Federated Strategic Income A (STIAX - MF report) invests in three major categories of fixed-income securities. These include domestic securities rated below investment grade as well as those rated higher and foreign securities. Not more than 50% of its assets may be invested in any single category. The diversified bond mutual fund returned 6.35% in the last one year period.
Joseph M. Balestrino is the fund manager and he has managed this diversified bond mutual fund since 1996.
Virtus Multi-Sector Fixed-Income A (NAMFX - MF report) seeks current income and preservation of capital. The fund utilizes at least 80% its assets to purchase a wide range of fixed income securities. It purchases U.S. government securities, investment-grade as well as high yield domestic debt securities. The diversified bond mutual fund returned 4.27% in the last one year period.
The diversified bond mutual fund has an expense ratio of 1.16% compared to a category average of 1.12%.
MFS Strategic Income A (MFIOX - MF report) invests the majority of its assets in debt securities of different kinds. The fund seeks to acquire domestic and foreign government securities, asset backed instruments as well as emerging market securities. The diversified bond mutual fund returned 5.52% in the last one year period.
James J. Calmas is the fund manager and he has managed this diversified bond mutual fund since 2005.
To view the Zacks Rank and past performance of all diversified 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.