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3 Short-Term Government Bond Funds for Portfolio Security

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A short-term government bond fund is a mutual fund that is limited by its investment objectives and fund bylaws to investing primarily in short-term obligations of the federal government or its agencies. Depending on the fund’s definition, the short term can be up to five years.

Mutual funds investing in government debt securities are among the most secure investment options that provide regular income while protecting the capital invested. Funds that are part of this category bring a great deal of stability to a portfolio with a large proportion of equity. They provide dividends more frequently than individual bonds. Hence, these are considered the safest in the bond fund category and are ideal options for risk-averse investors.

Below we share with you three short-term government bond mutual funds, viz. Lord Abbett Short Duration Income Fund Class A (LALDX - Free Report) , GMO U.S. Treasury Fund (GUSTX - Free Report) and Sit U.S. Government Securities Fund (SNGVX - Free Report) .Each has earned a Zacks Mutual Fund #1 Rank (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.

Lord Abbett Short Duration Income Fund Class A seeks current income along with the preservation of capital by investing most of its net assets in various types of short-duration, investment-grade debt securities, including corporate debts issued by domestic and foreign issuers that are denominated in U.S. dollars. LALDX advisors may also choose to invest invarious mortgage-backed, and other asset-backed securities issued or guaranteed by the U.S. government and inflation-linked investments.        

Lord Abbett Short Duration Income Fund Class A has three-year annualized returns of 0.9%. As of the end of February 2022, LALDX has invested 79.92% of its assets in various Miscellaneous Bonds.

GMO U.S. Treasury Fund invests most of its net assets in U.S. Treasury bills, bonds, notes, and other securities issued by the U.S. Treasury, along with Separately Traded Registered Interest and Principal Securities and other zero-coupon securities with interest rate duration of one year or less. GUSTX also invests in the above-mentioned collateralized repurchase agreements.

GMO U.S. Treasury Fund has three-year annualized returns of 0.6%. GUSTX has an expense ratio of 0.08% compared with the category average of 0.64%.

Sit U.S. Government Securities Fund seeks current income along with the preservation of capital by investing most of its net assets exclusively in various securities that are issued, guaranteed or insured by the U.S. government and its agencies with an average effective duration of approximately 0 to 5 years. SNGVX also invests a small portion of its net assets in pass-through securities.

Sit U.S. Government Securities Fund has three-year annualized returns of 0.73%. Bryce A. Doty has been one of the fund managers of SNGVX since December 1995.

To view the Zacks Rank and the past performance of all short-term government bond mutual funds, investors can click here to see the complete list of short-term government bond mutual funds.

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Sit US Government S (SNGVX) - free report >>

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