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Investing in international bond funds is one of the best ways to balance losses incurred from US markets, since interest rate fluctuations differ from country to country. This is because they show little correlation with domestic equities and only moderate correlation with investment grade domestic debt. They also help in diversifying currency exposure and protecting assets against a long-term secular decline in the U.S. dollar. With their widely diversified holdings, mutual funds offer a secure route to investing in the international bond market.
Below we will share with you 5 top rated international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all international bond funds, investors can click here to see the complete list of funds.
Consulting Group International Fixed Income ( TIFUX - MF report ) invests the majority of its assets in non-dollar denominated debt securities. The fund focuses on acquiring securities rated investment grade. Not more than 15% of its assets may be utilized to purchase securities rated below investment grade. The international bond mutual fund returned 8.49% in the last one year period.
The international bond mutual fund has a minimum initial investment of $100 and an expense ratio of 0.72% compared to a category average of 1.09%.
T. Rowe Price Emerging Markets Bond ( PREMX - MF report ) seeks to provide a high level of current income and invests heavily in emerging market debt securities. These could be both government securities and those issued by corporate entities. The international bond mutual fund returned 6.44% in the last one year period.
As of June 2012, this international bond mutual fund held 358 issues, with 7.66% of its total assets invested in Russian Federation 7.5%
Federated Emerging Market Debt A ( IHIAX - MF report ) invests a large proportion of its assets in debt securities issued from emerging markets. These securities may be dollar-denominated or may be issued in foreign currencies. The international bond mutual fund returned 8.89% in the last one year period.
The Fund Manager is Roberto Sanchez-Dahl and he has managed this international bond mutual fund since 2000.
GMO Currency Hedged International Bond III ( GMHBX - MF report ) seeks total return higher than its benchmark, the J.P. Morgan Non-U.S. government Bond Index (Hedged) (ex-Japan). The fund invests the majority of its assets in bonds and is non-diversified. It invests significantly higher proportion of its assets in countries which make up a large share of its benchmark. The international bond mutual fund returned 9.93% in the last one year period.
The international bond mutual fund has an expense ratio of 0.39% compared to a category average of 1.09%.
Fidelity New Markets Income ( FNMIX - MF report ) invests a large proportion of its assets in emerging market securities and other instruments related to such markets. The fund may also invest in other instruments and is non-diversified. The international bond mutual fund returned 11.59% in the last one year period.
The Fund Manager is John H. Carlson and he has managed this international bond mutual fund since 1995.
To view the Zacks Rank and past performance of all international 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.
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