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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 invest 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.
PGIM Short Duration High Yield Income Fund invests the majority of its assets in a diversified portfolio of high-yield fixed-income instruments that are below investment grade with varying maturities and other similar investments. The fund has returned 1.9% over the past three years.
As of August 2022, HYSAX had 52.4% of its assets invested in TOTAL MISC BONDS.
Vanguard Short Term Federal Fund invests the majority of its assets in short-term bonds issued or guaranteed by the U.S. government and its agencies, many of which are not backed by the full faith and credit of the U.S. government. VSGBX usually maintains a dollar-weighted average maturity of one to four years. The fund has returned 1.1% over the past five years.
Brian Quigley has been one of the fund managers of VSGBX since 2015.
GMO U.S. Treasury Fund invests the majority of its assets in Direct U.S. Treasury Obligations and repurchase agreements collateralized by these obligations. GUSTX usually maintains an estimated interest rate duration of one year or less for the fund's portfolio. The fund has returned 0.7% over the past three years.
GUSTX has an expense ratio of 0.1% compared with the category average of 0.64%.
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3 Short-Term Government Bond Funds to Hedge Risk
A short-term government bond fund is a mutual fund that is limited by its investment objectives and fund bylaws to invest 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 top-ranked short-term government bond mutual funds, namely PGIM Short Duration High Yield Income Fund (HYSAX - Free Report) , Vanguard Short Term Federal Fund (VSGBX - Free Report) and GMO U.S. Treasury Fund (GUSTX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
PGIM Short Duration High Yield Income Fund invests the majority of its assets in a diversified portfolio of high-yield fixed-income instruments that are below investment grade with varying maturities and other similar investments. The fund has returned 1.9% over the past three years.
As of August 2022, HYSAX had 52.4% of its assets invested in TOTAL MISC BONDS.
Vanguard Short Term Federal Fund invests the majority of its assets in short-term bonds issued or guaranteed by the U.S. government and its agencies, many of which are not backed by the full faith and credit of the U.S. government. VSGBX usually maintains a dollar-weighted average maturity of one to four years. The fund has returned 1.1% over the past five years.
Brian Quigley has been one of the fund managers of VSGBX since 2015.
GMO U.S. Treasury Fund invests the majority of its assets in Direct U.S. Treasury Obligations and repurchase agreements collateralized by these obligations. GUSTX usually maintains an estimated interest rate duration of one year or less for the fund's portfolio. The fund has returned 0.7% over the past three years.
GUSTX has an expense ratio of 0.1% compared with the category average of 0.64%.
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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