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.
Buy 3 Best-Rated Short Investment-Grade Bond Mutual Funds
Read MoreHide Full Article
Investment grade bonds are considered safer investments than those rated below investment grade, which are commonly known as high yield bonds or "junk" bonds. Investment-grade bonds are generally those debt securities that are rated 'AAA' and 'AA' (high credit quality) and 'A' and 'BBB' (medium credit quality) by bond rating firms, like Standard & Poor's.
Additionally, short-term bonds generally have maturity duration of five years and lower. Although, these debt securities are expected to provide less returns than the intermediate- and long-term ones, they have higher stability as shorter maturities are expected to reduce credit and interest rate risk. In this context, investing in short-term investment-grade mutual funds might be a wise choice for those seeking to derive safe returns.
Principal Short-Term Income A (SRHQX - Free Report) seeks growth of income and effective investment management. SRHQX generally invests in fixed-income securities, which include high quality short-term debt securities. These bonds are normally rated BBB- or higher. The fund is believed to maintain an effective duration of not more than five years. Principal Short-Term Income A fund has returned 1.9% over the past one year.
As of October 2016, SRHQX held 422 issues, with 1.35% of its assets invested in FNMA 1.5%.
Prudential Short-Term Corporate Bond A(PBSMX - Free Report) invests a large chunk of its assets in corporation bonds irrespective of their maturity durations. PBSMX is expected to maintain an effective duration of not more than three years. The fund may also invest in mortgage-related and asset-backed securities and allocate a maximum of 35% of its assets in dollar denominated debt securities issued by foreign entities. Prudential Short-Term Corporate Bond A fund has returned 2% over the past one year.
PBSMX has an expense ratio of 0.77% as compared to the category average of 0.78%.
William Blair Income N seeks growth of income. WBRRX invests a bulk of its assets in dollar-denominated corporate bonds of both U.S. and non-U.S. companies with ratings of "A -" or higher. The fund also invests in government, collateralized and commercial paper obligations with the highest ratings. William Blair Income N fund has returned 2.2% over the past one year.
Christopher Vincent is the fund manager of WBRRX since 2002.
Image: Bigstock
Buy 3 Best-Rated Short Investment-Grade Bond Mutual Funds
Investment grade bonds are considered safer investments than those rated below investment grade, which are commonly known as high yield bonds or "junk" bonds. Investment-grade bonds are generally those debt securities that are rated 'AAA' and 'AA' (high credit quality) and 'A' and 'BBB' (medium credit quality) by bond rating firms, like Standard & Poor's.
Additionally, short-term bonds generally have maturity duration of five years and lower. Although, these debt securities are expected to provide less returns than the intermediate- and long-term ones, they have higher stability as shorter maturities are expected to reduce credit and interest rate risk. In this context, investing in short-term investment-grade mutual funds might be a wise choice for those seeking to derive safe returns.
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 is expected to outperform their peers in the future. Investors can click here to see the complete list of funds.
Principal Short-Term Income A (SRHQX - Free Report) seeks growth of income and effective investment management. SRHQX generally invests in fixed-income securities, which include high quality short-term debt securities. These bonds are normally rated BBB- or higher. The fund is believed to maintain an effective duration of not more than five years. Principal Short-Term Income A fund has returned 1.9% over the past one year.
As of October 2016, SRHQX held 422 issues, with 1.35% of its assets invested in FNMA 1.5%.
Prudential Short-Term Corporate Bond A(PBSMX - Free Report) invests a large chunk of its assets in corporation bonds irrespective of their maturity durations. PBSMX is expected to maintain an effective duration of not more than three years. The fund may also invest in mortgage-related and asset-backed securities and allocate a maximum of 35% of its assets in dollar denominated debt securities issued by foreign entities. Prudential Short-Term Corporate Bond A fund has returned 2% over the past one year.
PBSMX has an expense ratio of 0.77% as compared to the category average of 0.78%.
William Blair Income N seeks growth of income. WBRRX invests a bulk of its assets in dollar-denominated corporate bonds of both U.S. and non-U.S. companies with ratings of "A -" or higher. The fund also invests in government, collateralized and commercial paper obligations with the highest ratings. William Blair Income N fund has returned 2.2% over the past one year.
Christopher Vincent is the fund manager of WBRRX since 2002.
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.
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 >>