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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.
GMO Inflation Indexed Plus Bond III invests heavily in inflation-protected securities. The fund aims to provide total return greater than the Barclays Capital U.S. Treasury Inflation Notes index. The government bond mutual fund is non-diversified and returned 10.67% over the last one year period.
The Fund Manager is Thomas F. Cooper and he has managed this government bond fund since 2006.
Lord Abbett Income A (LAGVX - MF report) seeks high current income. The fund invests a minimum of 65% of its assets in investment grade debt instruments. These instruments may include securities that are backed by the U.S. government. It may also invest in derivative instruments. The government bond mutual fund returned 9.78% over the last one year period.
The government bond mutual fund has a minimum initial investment of $1,500 and an expense ratio of 0.80% compared to a category average of 0.89%.
Western Asset Mortgage Backed Securities A (SGVAX - MF report) 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 7.89% over the last one year period.
The Fund Manager is Stephen Walsh and he has managed this government bond fund since 2006.
Homestead Short-Term Government (HOSGX - MF report) seeks current income. The fund invests a large share of its assets in fixed income bearing instruments. These instruments are backed by U.S. government. It invests predominantly U.S. Treasury securities and instruments issued by agencies of U.S. government. The government bond mutual fund returned 4.38% over the last one year period.
As of December 2012, this government bond mutual fund held 194 issues, with 4.28% of its total assets invested in Overseas Private Invt Corp U S Govt Gtd.
Franklin Real Return A (FRRAX - MF report) invest heavily in investment grade debt instruments. A maximum of 20% of its assets may be invested in debt instruments rated below investment grade. The government bond mutual fund returned 1.98% over the last one year period.
The government bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.90% compared to a category average of 0.82%.
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.