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3 Top-Ranked Short-Term Investment-Grade Bond Mutual Funds
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Investors seeking to derive safe return by investing in quality securities may consider short-term investment-grade mutual funds. These mutual funds invest in debt securities with maturity duration below five years. Though short-term bonds are believed to offer less return compared to intermediate- and long-term ones, they have higher stability as shorter maturities are expected to reduce credit and interest rate risk.
Meanwhile, investment grade bonds are generally considered safer than those rated below investment grade, which are commonly known as "junk" bonds. Bonds that are rated 'AAA' and 'AA' (high credit quality) and 'A' and 'BBB' (medium credit quality) by bond rating firms, like Standard & Poor's, are usually regarded as investment-grade bonds. Also, bond funds are considered good investment propositions in a low-rate environment.
Below we will share with you three top rated short-term investment-grade bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (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 short-term investment-grade bond mutual funds, investors can click here to see the complete list of funds.
Vanguard Short-Term Investment-Grade Investor (VFSTX - Free Report) seeks current income with a minimum level of volatility. VFSTX invests most of its assets in short-term debt securities that are rated investment grade. VFSTX invests in securities having ratings of A3 or higher. VFSTX may also invest in securities that are rated Baa1, Baa2, or Baa3, commonly known as medium-quality securities. VFSTX may also invest in intermediate-term securities but to a lesser extent. Vanguard Short-Term Investment-Grade Investor has a year-to-date return of 2.8%.
Gregory S. Nassour is the fund manager of VFSTX since 2008.
Fidelity Short-Term Bond (FSHBX - Free Report) invests a large chunk of its assets in investment-grade bonds across a wide range of market sectors. FSHBX is expected to maintain an interest rate risk similar to that of the Barclays U.S. 1-3 Year Government/Credit Bond Index. FSHBX is also expected to maintain a dollar-weighted average duration of not more than three years. FSHBX invests in debt securities throughout the globe. Fidelity Short-Term Bond has a year-to-date return of 1.5%.
FSHBX has an expense ratio of 0.45% as compared to the category average of 0.80%.
Wells Fargo Short-Term Bond A (SSTVX - Free Report) seeks current income with preservation of capital. SSTVX invests a major portion of its assets in debt securities. SSTVX may invest not more than a quarter of its assets in foreign debt securities that are not denominated in the U.S. dollar. SSTVX may also invest a maximum of 15% of its assets in securities that are below investment grade. SSTVX invests in securities including corporate and U.S. government obligations. SSTVX invests in debt securities throughout the globe. Wells Fargo Short-Term Bond A has a year-to-date return of 1.7%.
As of April 2016, SSTVX held 299 issues, with 27.6% of its assets invested in Us 2yr Note (Cbt) Jun16 Xcbt 20160630.
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.
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3 Top-Ranked Short-Term Investment-Grade Bond Mutual Funds
Investors seeking to derive safe return by investing in quality securities may consider short-term investment-grade mutual funds. These mutual funds invest in debt securities with maturity duration below five years. Though short-term bonds are believed to offer less return compared to intermediate- and long-term ones, they have higher stability as shorter maturities are expected to reduce credit and interest rate risk.
Meanwhile, investment grade bonds are generally considered safer than those rated below investment grade, which are commonly known as "junk" bonds. Bonds that are rated 'AAA' and 'AA' (high credit quality) and 'A' and 'BBB' (medium credit quality) by bond rating firms, like Standard & Poor's, are usually regarded as investment-grade bonds. Also, bond funds are considered good investment propositions in a low-rate environment.
Below we will share with you three top rated short-term investment-grade bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (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 short-term investment-grade bond mutual funds, investors can click here to see the complete list of funds.
Vanguard Short-Term Investment-Grade Investor (VFSTX - Free Report) seeks current income with a minimum level of volatility. VFSTX invests most of its assets in short-term debt securities that are rated investment grade. VFSTX invests in securities having ratings of A3 or higher. VFSTX may also invest in securities that are rated Baa1, Baa2, or Baa3, commonly known as medium-quality securities. VFSTX may also invest in intermediate-term securities but to a lesser extent. Vanguard Short-Term Investment-Grade Investor has a year-to-date return of 2.8%.
Gregory S. Nassour is the fund manager of VFSTX since 2008.
Fidelity Short-Term Bond (FSHBX - Free Report) invests a large chunk of its assets in investment-grade bonds across a wide range of market sectors. FSHBX is expected to maintain an interest rate risk similar to that of the Barclays U.S. 1-3 Year Government/Credit Bond Index. FSHBX is also expected to maintain a dollar-weighted average duration of not more than three years. FSHBX invests in debt securities throughout the globe. Fidelity Short-Term Bond has a year-to-date return of 1.5%.
FSHBX has an expense ratio of 0.45% as compared to the category average of 0.80%.
Wells Fargo Short-Term Bond A (SSTVX - Free Report) seeks current income with preservation of capital. SSTVX invests a major portion of its assets in debt securities. SSTVX may invest not more than a quarter of its assets in foreign debt securities that are not denominated in the U.S. dollar. SSTVX may also invest a maximum of 15% of its assets in securities that are below investment grade. SSTVX invests in securities including corporate and U.S. government obligations. SSTVX invests in debt securities throughout the globe. Wells Fargo Short-Term Bond A has a year-to-date return of 1.7%.
As of April 2016, SSTVX held 299 issues, with 27.6% of its assets invested in Us 2yr Note (Cbt) Jun16 Xcbt 20160630.
To view the Zacks Rank and past performance of all short-term investment-grade 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.