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 portfolios with 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.
Lord Abbett Income A (LAGVX - Free Report) seeks high return along with capital preservation. A minimum of 65% of its assets are invested in debt securities backed by the domestic government. It may also invest in other debt securities which are denominated in U.S. dollars and inflation related instruments. Investments are also made in derivatives including forwards, options and futures. The government bond mutual fund returned 10.04% over the last one year period.
The fund has an expense ratio of 0.78% as compared to category average of 0.86%.
AMG Managers Intermediate Duration Government (MGIDX - Free Report) invests majority of its assets in debt securities of domestic government or other agencies authorized by the government. It invests in securities having impressive credit quality to reduce risk. The government bond mutual fund returned 5.72% over the last one year period.
Daniel R. Adler is the fund manager and has managed this fund since 2003.
Hussman Strategic Total Return (HSTRX - Free Report) seeks capital growth and return on income on a long-term basis. The fund invests mainly in fixed-income securities such as U.S. Treasury bonds, mortgage-backed securities and notes and bills. 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 6.14% over the last one year period.
As of March 2014, this fund held 45 issues with 23.26% of its assets invested in US Treasury Notes.
Performance Trust Strategic Bond (PTIAX - Free Report) invests a lion’s share of its assets in fixed-income securities including bonds and debt securities which are backed by the domestic government or other privately owned companies. It may also invest a significant share of its assets in other derivatives such as options and swaps in order to reduce risk exposure. The government bond mutual fund returned 6.06% over the last one year period.
The fund has an expense ratio of 0.95% as compared to category average of 1.11%.
Sentinel Total Return Bond A seeks high return from a combination of capital growth and current income. The fund invests predominantly in different kinds of fixed-income securities regardless of its duration. Half of its assets may be invested in junk bonds. The government bond mutual fund returned 8.49% over the last one year period.
Jason Doiron is the fund manager and has managed this fund since 2010.
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.