This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
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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, investors can click here to see the complete list of funds.
PIMCO Income A (PONAX - MF report) invests a minimum of 65% of its assets in fixed-income securities from different sectors and with diverse maturity periods. A maximum of half of its assets may be utilized to purchase junk bonds. The diversified bond mutual fund returned 5.92% in the last one year period.
The diversified bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.80% compared to a category average of 1.12%.
Brandes Separately Managed Account Reserve Trust (SMARX - MF report) seeks maximum total return over the long term. The fund invests in a wide range of debt securities. These may be issued by governments as well as companies, both domestic and foreign. The diversified bond mutual fund returned 4.35% in the last one year period.
As of March 2012, this diversified bond mutual fund held 66 issues, with 4.34% of its total assets invested in Jpmorgan Chase FRN.
Optimum Fixed Income A (OAFIX - MF report) invests the majority of its assets in fixed-income securities. The fund purchases a wide range of government securities, corporate debt, municipal and asset-backed securities. The weighted average maturity period of the fund varies between five to ten years. The diversified bond mutual fund returned 6.67% in the last one year period.
Paul Grillo is the fund manager and has managed this diversified bond mutual fund since 2003.
Fidelity Total Bond (FTBFX - MF report) seeks high current income. The fund utilizes the majority of its assets to purchase a wide range of debt securities and related repurchase agreements. The diversified bond mutual fund returned 6.87% in the last one year period.
The diversified bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.45% compared to a category average of 0.92%.
RidgeWorth Total Return Bond A (CBPSX - MF report) primarily purchases securities rated investment grade by at least one domestic securities rating firm. Not more than 20% of its assets are utilized to purchase high-yield debt securities rated investment grade. The diversified bond mutual fund returned 8.86% in the last one year period.
Adrien Webb is the fund manager and he has managed this diversified bond mutual fund since 2002.
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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