Fixed-income securities are preferred by investors ready to forgo capital growth for regular income flows. The expense involved in creating such a portfolio of bonds from different categories can be considerable. This is why most investors select mutual funds since these are convenient and affordable. Also, diversified bond funds reduce the risk involved in holding securities from different sectors. Therefore, a downturn in any one sector has a partial effect on the fund’s fortunes.
Below we share with you three best-ranked diversified bond mutual funds. 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 diversified bond funds.
T. Rowe Price Spectrum Income (RPSIX - Free Report) seeks growth of income along with moderate fluctuation in share price. RPSIX diversifies its assets in a number of T. Rowe Price mutual funds, which represent specific market segments. The fund invests in bond funds, income-oriented stock funds and money-market funds. It also may invest in dividend-paying stocks, both short-and long-term securities, high-yield bonds and high-quality bonds. T. Rowe Price Spectrum Income has one-year annualized returns of 4.3%.
As of December 2017, RPSIX held 15 issues, with 21.61% of its assets invested in T. Rowe Price New Income.
Hartford Strategic Income A (HSNAX - Free Report) seeks total returns over the long run with growth of income. HSNAX invests in debt securities issued by U.S. and non-U.S. companies, which are expected to offer high returns. It invests in debt securities including junk bonds and highly rated securities. Hartford Strategic Income A has returned 5% in a year.
Campe Goodman has been one of the fund managers of HSNAX since 2012.
PIMCO Income A (PONAX - Free Report) invests a minimum of 65% of its assets in fixed income securities from a wide range of sectors. These securities may include options, futures contracts and swap agreements. PONAX may invest not more than half of its assets in securities that are rated below investment grade. The fund seeks maximization of income. PIMCO Income A has returned 4.9% over a year.
PONAX has an expense ratio of 0.85% compared with the category average of 1.00%.
To view the Zacks Rank and past performance of all diversified bond mutual funds, investors can click here to see the complete list of diversified bond funds.
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