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.
|Zacks Rank||Definition||Annualized Return|
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The economic and political turmoil in the debt plagued Eurozone area has caused a risk aversion climate among investors, thereby increasing the demand for ‘safe haven’ investment avenues such as Government Bonds. This has caused a decent rally in the Government Bond market in the recent past leading to plummeting yields near their all time lows. Moreover, given the sluggish economic growth in most developed and emerging markets coupled with policy inaction from central banks, it is clear that the ‘flight to safety’ for investors is here to stay for quite some time. Government Bond mutual funds, with their diversified exposure provide stability of capital invested along with a scope of earning regular interest income.
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.
T. Rowe Price US Treasury Long-Term (PRULX - MF report) invests at least 85% of its assets in U.S Treasury securities which have the maximum credit protection backed by the Federal Government. The fund targets the longer end of the yield curve with the portfolio weighted average maturity period forecasted in the range of 15 to 20 years. The government bond mutual fund returned 31.43% over the last one year period.
The Fund Manager is Brian J. Brennan and he has managed this government bond fund since 2003.
Fidelity Spartan Long Term Treasury Bond Index (FLBIX - MF report) seeks high levels of current income by investing at least 80% of its assets in securities in the Barclays Capital U.S. Long Treasury Bond Index. The fund strives for a dollar-weighted average maturity of 10 years or more. The government bond mutual fund returned 32.29% over the last one year period.
The government bond mutual fund has a minimum initial investment of $10,000 and an expense ratio of 0.20% compared to a category average of 0.82%.
Rydex Government Long Bond 1.2x Strategy (RYGBX - MF report) seeks returns which are 1.2x the returns of the long dated U.S Treasury Bonds. The fund invests in a variety of derivative instruments and U.S Government securities to match its investment objective. The government bond mutual fund returned 49.36% over the last one year period.
As of July 2012, this government bond mutual fund held 7 issues, with 68.40% of its total assets invested in US Treasury Bond 3%.
Vanguard Long-Term Treasury Investor (VUSTX - MF report) targets the longer end of the yield curve and invests in securities issued by the U.S. Treasury. The fund aims at maintaining a weighted average maturity period of 15 to 30 years thereby making the fund more sensitive to interest rate movements. The government bond mutual fund returned 32.36% over the last one year period.
The government bond mutual fund has a minimum initial investment of $3,000 and an expense ratio of 0.20% compared to a category average of 0.82%.
Dreyfus US Treasury Long-Term (DRGBX - MF report) seeks to maximize total returns by investing in at least 80% of its net assets in the U.S Treasury securities. The fund has an effective duration of 7.5 years and seeks to maintain a portfolio weighted average maturity of more than or equal to 10 years. The government bond mutual fund returned 31.94% over the last one year period.
The Fund Manager is Robert Bayston and he has managed this government bond fund since 2008.
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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