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Best of Funds

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.

VALIC Company I Inflation Protected (VCTPX - MF report) seeks high real return. The fund invests the majority of its assets in inflation protected fixed income instruments that are issued by domestic and foreign governments. A maximum of 10% of its assets may be invested in junk bonds. The government bond mutual fund returned 8.03% over the last one year period.

The government bond mutual fund has an expense ratio of 0.61% compared to a category average of 0.80%.

AMF Short US Government (ASITX - MF report) invests exclusively in instruments that are issued or backed by the U.S. government or related agencies. It also repurchases agreements backed by such instruments. Normally, the fund purchases U.S. Treasury Notes which have a maturity period of 1 to 3 years. The government bond mutual fund returned 4.92% over the last one year period.

The Fund Manager is Sean Kelleher and he has managed this government bond fund since 2009.

PIMCO Real Return A (PRTNX - MF report) seeks high real return. The fund invests heavily in bonds issued by U.S. and foreign government and related agencies which provide returns higher than the inflation rate over a business cycle. It predominantly invests in securities rated investment grade. The government bond mutual fund returned 8.72% over the last one year period.

As of September 2012, this government bond mutual fund held 929 issues, with 10.73% of its total assets invested in Fin Fut Euro$ Cme 03/14/16.

John Hancock Funds2 Real Return Bond 1 (JIRRX - MF report) invests heavily in domestic and foreign government instruments that are inflation protected. A maximum of 10% of its assets may be invested in junk bonds. The government bond mutual fund returned 8.71% over the last one year period.

The government bond mutual fund has an expense ratio of 0.81% compared to a category average of 0.80%.

Western Asset Mortgage Backed Securities A (SGVAX - MF report) seeks current return. The fund invests the majority of its assets in mortgage backed securities. These may be issued by agencies such as the Government National Mortgage Association (Ginnie Mae) as well as government sponsored agencies. The government bond mutual fund returned 7.90% over the last one year period.

The Fund Manager is Stephen Walsh and he has managed this government bond fund since 2006.

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.

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