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3 Top-Ranked Diversified Bond Mutual Funds to Hedge Your Portfolio

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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.

Moreover, investing in diversified bond funds is 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.

Below, we share with you three top-ranked diversified bond mutual funds, Invesco Global Strategic Income Fund (OPSIX - Free Report) , Goldman Sachs Strategic Income Fund (GSZAX - Free Report) and Pimco Income Fund (PONAX - 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.

Invesco Global Strategic Income Fund invests most of its assets in debt securities like government bonds and notes, mortgage-related securities, corporate debts, including lower-grade, high-yield domestic and foreign corporate debts, “structured” notes, participation interests in loans, investments in pooled investment entities, asset-backed securities and zero-coupon securities. OPSIX advisors may also invest in foreign issues.

Invesco Global Strategic Income Fund has three-year annualized returns of 9.7%. As of the end of April 2025, OPSIX had 41.6% of its assets invested in Miscellaneous Bonds.

Goldman Sachs Strategic Income Fund invests most of its assets in a diversified portfolio of domestic and foreign investment grade and non-investment grade fixed-income securities. GSZAX advisors generally invest in U.S. and non-U.S. government sovereign debt securities, agency securities, corporate debt securities, privately issued adjustable-rate and fixed-rate mortgage-backed securities, asset-backed securities, custodial receipts, municipal securities, loan participations, and loan assignments and convertible securities.

Goldman Sachs Strategic Income Fund has three-year annualized returns of 8.6%. GSZAX has an expense ratio of 1.06%.

Pimco Income Fund invests most of its net assets in a diversified portfolio of Fixed Income Instruments of varying maturities, like forwards or derivatives instruments such as options, futures contracts or swap agreements. PONAX advisors may also invest in high-yield securities rated below investment grade by Moody's, S&P or Fitch, or unrated which, according to the fund's portfolio managers, are of comparable quality.

Pimco Income Fund has three-year annualized returns of 8.4%. Joshua Anderson has been the fund manager of PONAX since end of July 2018.

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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