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3 Diversified Bond Mutual Funds to Secure Your Portfolio

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Investing in diversified bond funds is more preferred to individual bond investing, as building a portfolio of the second type may prove relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive.

Moreover, mutual funds having significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.

Below, we share with you three top-ranked diversified bond mutual funds, namely PIMCO CommoditiesPLUS Strategy (PCLAX - Free Report) , BBH Limited Duration Fund (BBBMX - Free Report) and Aristotle Strategic Income I-2 (PLSFX - 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.

PIMCO CommoditiesPLUS Strategy fund invests most of its net assets directly in commodities or commodity-linked derivative instruments and in a portfolio of low-volatility, fixed-income instruments like bonds, debt securities and other instruments with similar economic characteristics. PCLAX advisors generally invest in domestic-or-foreign, public-or-private sector issues.

PIMCO CommoditiesPLUS Strategy fund has three-year annualized returns of 15.5%. As of the end of September 2023, PCLAX has 11% of its assets invested in miscellaneous bonds.

BBH Limited Duration Fund invests most of its net assets in a diversified portfolio of fixed-income securities, which includes floating or variable-rate debt instruments. BBBMX advisors generally invest in issues that are performing well and available at an attractive valuation.

BBH Limited Duration Fund has three-year annualized returns of 2.7%. BBBMX has an expense ratio of 0.35%.

Aristotle Strategic Income I-2 fund invests most of its net assets in income-producing investment-grade and non-investment-grade debt instruments. PLSFX advisors generally invest in floating-rate loans, corporate debt securities, asset-backed securities, mortgage-related securities, U.S. government-backed securities and agency securities.

Aristotle Strategic Income I-2 fund has three-year annualized returns of 1.2%. Michael Marzouk has been the fund manager of PLSFX since February 2016.

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

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