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.
Western Asset Mortgage Backed Securities A (SGVAX - MF report) invests a large share of its assets in mortgage-backed securities issued by government backed institutions such as Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac). The government bond mutual fund returned 7.52% over the last one year period.
The government bond mutual fund has an expense ratio of 0.99% compared to a category average of 0.89%.
Hussman Strategic Total Return (HSTRX - MF report) seeks capital growth and return on income on a long term basis. The fund invests mainly in fixed-income securities. A maximum of 30% will be invested in Treasury interest Strips and zero-coupon bonds. The maturity period of its portfolio is usually between 1 year and 15 years. The government bond mutual fund returned -7.68% over the last one year period.
As of March 2013, this government bond mutual fund held 47 issues, with 14.62% of its total assets invested in U.S. Treasury Note 1.625%
ProFunds Rising Rates Opportunity (RRPSX - MF report) invests in derivatives which taken together provide such returns. It invests with the intention of getting returns on a daily basis which is 1.25 times the inverse of that of the daily returns of the 30-Year U.S. Treasury Bond. The government bond mutual returned 8.75% over the last one year period.
The Fund Manager is Michelle Liu and she has managed this government bond fund since 2009.
Rydex Inverse Government Long Bond Strategy (RYJUX - MF report) seeks returns which is inversely proportional to the daily returns of the Long Treasury Bond for U.S. Treasury debt instruments. A major portion of assets is invested in derivatives. The government bond mutual fund returned 11.13% over the last one year period.
The government bond mutual fund has an expense ratio of 1.39% compared to a category average of 1.94%.
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 returned 1.30% over the last one year period.
The Fund Manager is T. Anthony Coffey and he has managed this government bond fund since 2004.
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 https://www.zacks.com/funds.