We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Diversified Bond Mutual Funds to Bet Your Money On
Read MoreHide Full Article
As the U.S economy reels under multi-decade high inflation and braces for a looming economic downturn, investors are looking for an investment strategy wherein they can generate a steady flow of income while minimizing risk. Informed diversification is the order of the day, and investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.
Diversified bond mutual funds are great options for investors seeking to hold a varied portfolio. These consist of fixed-income securities, which provide a steady rate of interest and lower risk when compared to stocks. With risk and return decentralized across sectors and geographies, these bond funds may be ideal in volatile markets where investors are running for cover. Duration, or maturity, is a significant aspect of diversified bond funds, as shorter duration funds are less likely to be impacted by changes in or tightening of monetary policy.
Investing in diversified bond funds is preferable to individual bond investing, as the latter may prove relatively more expensive. A higher level of liquidity also makes them more attractive. The flexibility to free up cash is crucial in these uncertain times.
In summary, diversified bond mutual funds provide much-required stability in a volatile market and in one where interest rate hikes are expected to ease off in the foreseeable future.
Hence, with the recession looming large in the U.S economy, astute investors should invest in diversified bond mutual funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected four such diversified bond mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio. We have also made sure that a lion’s share of the portfolio is invested in bonds.
BBH Limited Duration Fund Class N (BBBMX - Free Report) seeks maximum total return consistent with the preservation of capital. BBBMX usually invests in a well-diversified portfolio of durable, performing fixed-income instruments like asset-backed securities, notes and bonds.
Andrew P. Hofer has been the lead manager of BBBMX since Feb 27, 2011.
BBBMX’s 3-year and 5-year annualized returns are 0.9% and 1.7%, respectively. Its net expense ratio is 0.35% compared to the category average of 0.44%. BBBMX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
DWS Short Duration Fund (DBPIX - Free Report) invests the majority of its total assets in fixed-income securities which are rated within the top four credit rating categories by a nationally recognized statistical rating organization. It invests in securities of different maturities.
Rick J. Smith has been the lead manager of DBPIX since Jan 31, 2016.
DBPIX’s 3-year and 5-year annualized returns are 0.5% and 1.4%, respectively. Its net expense ratio is 0.50% compared to the category average of 0.68%. DBPIX has a Zacks Mutual Fund Rank #2.
Putnam Short Duration Bond Fund Class Y (PARYX - Free Report) seeks maximum current income consistent with the preservation of capital. PARYX usually invests in a well-diversified portfolio of durable, performing fixed-income instruments like corporate credit, sovereign debt and mortgage-backed securities.
Brett Kozlowski has been the lead manager of PARYX since May 31, 2018.
PARYX’s 3-year and 5-year annualized returns are 0.2% and 1.5%, respectively. Its net expense ratio is 0.36% compared to the category average of 0.68%. PARYX has a Zacks Mutual Fund Rank #2.
TIAA-CREF Short Term Bond Fund (TCTRX - Free Report) invests the majority of its assets in U.S. Treasury and agency securities and investment-grade fixed-income investments with an average maturity or duration of less than 5 years. TCTRX usually invests in a broad range of investment-grade bonds and fixed-income securities.
Peter L. Agrimson has been the lead manager of TCTRX since Jul 31, 2019.
TCTRX’s 3-year and 5-year annualized returns are 0.2% and 1%, respectively. Its net expense ratio is 0.54% compared to the category average of 0.68%. TCTRX has a Zacks Mutual Fund Rank #2.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
4 Diversified Bond Mutual Funds to Bet Your Money On
As the U.S economy reels under multi-decade high inflation and braces for a looming economic downturn, investors are looking for an investment strategy wherein they can generate a steady flow of income while minimizing risk. Informed diversification is the order of the day, and investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.
Diversified bond mutual funds are great options for investors seeking to hold a varied portfolio. These consist of fixed-income securities, which provide a steady rate of interest and lower risk when compared to stocks. With risk and return decentralized across sectors and geographies, these bond funds may be ideal in volatile markets where investors are running for cover. Duration, or maturity, is a significant aspect of diversified bond funds, as shorter duration funds are less likely to be impacted by changes in or tightening of monetary policy.
Investing in diversified bond funds is preferable to individual bond investing, as the latter may prove relatively more expensive. A higher level of liquidity also makes them more attractive. The flexibility to free up cash is crucial in these uncertain times.
In summary, diversified bond mutual funds provide much-required stability in a volatile market and in one where interest rate hikes are expected to ease off in the foreseeable future.
Hence, with the recession looming large in the U.S economy, astute investors should invest in diversified bond mutual funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected four such diversified bond mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio. We have also made sure that a lion’s share of the portfolio is invested in bonds.
BBH Limited Duration Fund Class N (BBBMX - Free Report) seeks maximum total return consistent with the preservation of capital. BBBMX usually invests in a well-diversified portfolio of durable, performing fixed-income instruments like asset-backed securities, notes and bonds.
Andrew P. Hofer has been the lead manager of BBBMX since Feb 27, 2011.
BBBMX’s 3-year and 5-year annualized returns are 0.9% and 1.7%, respectively. Its net expense ratio is 0.35% compared to the category average of 0.44%. BBBMX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
DWS Short Duration Fund (DBPIX - Free Report) invests the majority of its total assets in fixed-income securities which are rated within the top four credit rating categories by a nationally recognized statistical rating organization. It invests in securities of different maturities.
Rick J. Smith has been the lead manager of DBPIX since Jan 31, 2016.
DBPIX’s 3-year and 5-year annualized returns are 0.5% and 1.4%, respectively. Its net expense ratio is 0.50% compared to the category average of 0.68%. DBPIX has a Zacks Mutual Fund Rank #2.
Putnam Short Duration Bond Fund Class Y (PARYX - Free Report) seeks maximum current income consistent with the preservation of capital. PARYX usually invests in a well-diversified portfolio of durable, performing fixed-income instruments like corporate credit, sovereign debt and mortgage-backed securities.
Brett Kozlowski has been the lead manager of PARYX since May 31, 2018.
PARYX’s 3-year and 5-year annualized returns are 0.2% and 1.5%, respectively. Its net expense ratio is 0.36% compared to the category average of 0.68%. PARYX has a Zacks Mutual Fund Rank #2.
TIAA-CREF Short Term Bond Fund (TCTRX - Free Report) invests the majority of its assets in U.S. Treasury and agency securities and investment-grade fixed-income investments with an average maturity or duration of less than 5 years. TCTRX usually invests in a broad range of investment-grade bonds and fixed-income securities.
Peter L. Agrimson has been the lead manager of TCTRX since Jul 31, 2019.
TCTRX’s 3-year and 5-year annualized returns are 0.2% and 1%, respectively. Its net expense ratio is 0.54% compared to the category average of 0.68%. TCTRX has a Zacks Mutual Fund Rank #2.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>