Back to top

Mutual Fund Commentary

Conservative investors prefer debt instruments not only because they safeguard the capital invested but also for the regular income flows they provide. Bonds bring a great deal of stability to an equity-heavy portfolio 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.

Hussman Strategic Total Return (HSTRX - MF report) seeks total return over the long term. The fund invests heavily in fixed income instruments. These instruments are primarily securities issued by the U.S. Treasury, including bills, bond and notes. It may also invest in Treasury inflation-protected securities (TIPS). The government bond mutual fund has a three year annualized return of 2.98%.

The government bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.63% compared to a category average of 0.91%.

Franklin Real Return A (FRRAX - MF report) invests the majority of its assets 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 has a three year annualized return of 3.48%.

As of December 2012, this government bond mutual fund held 229 issues, with 10.62% of its total assets invested in US Treasury Note 1.25%.

Rydex Inverse Government Long Bond Strategy (RYJUX - MF report) invests a large share of its assets in domestic and foreign inflation-indexed government bonds. The fund focuses on purchasing securities rated investment grade. Not more than 10% of its assets may be invested in high yield securities. The government bond mutual fund has a three year annualized return of -15.18%.

The Fund Manager is Mihir Worah and he has managed this government bond fund since 2008.

PIMCO Real Return A (PRTNX - MF report) invests the majority of its assets in bonds issued by the domestic and foreign governments 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 has a three year annualized return of 8.54%.

The government bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.85% compared to a category average of 0.82%.

John Hancock Funds2 Real Return Bond 1 (JIRRX - MF report) seeks high real return. The fund 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 has a three year annualized return of 8.78%.

The Fund Manager is Mihir Worah 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.

Please login to Zacks.com or register to post a comment.

If you wish to go to ZacksFunds.com, click OK. If you do not, click Cancel.

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 26.93 +9.96%
CENTURY ALU… CENX 27.23 +9.01%
BANCO DO BR… BDORY 16.77 +7.98%
CANADIAN SO… CSIQ 38.10 +7.51%
WILLDAN GRO… WLDN 11.37 +5.77%