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Mutual Fund Commentary

Mutual funds investing in debt securities are among the most secure investment options which provide regular income while protecting capital invested. Funds which are part of this category bring a great deal of stability to portfolio which a large proportion of equity, while providing dividends more frequently than individual bonds. U.S government bonds funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor.

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.

ProFunds US Government Plus (GVPSX - MF report) seeks daily returns which are 1.25 times the daily price movement of the most recently issued Long Bond. The fund purchases domestic government bonds and derivatives that provide such daily returns. The government bond mutual fund returned 4.47% over the last one year period.

The government bond mutual fund has an expense ratio of 2.47% compared to a category average of 0.83%.

Vanguard Long-Term Treasury Investor (VUSTX - MF report) utilizes a large share of its assets to purchase securities issued by the U.S. Treasury, including bills, bond and notes. The fund aims at maintaining a weighted average maturity period of 15 to 30 years. The government bond mutual fund returned 6.2% over the last one year period.

The Fund Manager is David R. Glocke and he has managed this government bond fund since 2001.

Wasatch-Hoisington US Treasury (WHOSX - MF report) seeks return higher than the inflation rate over a business cycle. The fund 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. The government bond mutual fund returned 6.66% over the last one year period.

As of September 2012, this government bond mutual fund held 18 issues, with 13.68% of its total assets invested in US Treas Bond Stripped Prin Pmt.

Fidelity Spartan Long-Term Treasury Bond Index (FLBAX - MF report) invests the majority of its assets in securities which are part of the Barclays Capital U.S. Long Treasury Bond index. The dollar-weighted average maturity period of the portfolio is at least 10 years or more. The government bond mutual fund returned 6% over the last one year period.

The government bond mutual fund has an expense ratio of 0.10% compared to a category average of 0.96%.

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 7.3% over the last one year period.

The Fund Manager is Ryan A. Harder and he has managed this government bond fund since 2008.

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.

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