Bonds are the logical choice of investors who are willing to forgo capital growth for a regular income stream. The cost of individually purchasing bonds from various categories may become a particularly expensive proposition. This is why mutual funds are the most affordable method of investing in bonds. Diversified bond mutual funds further reduce the risk involved since their portfolios consist of securities from various classes and sectors. This ensures that any negative fluctuation in a specific sector only has a partial effect on the fund’s fortunes.
Below we will share with you 5 top rated diversified bond mutual funds. Each has earned a Zacks #1 Rank (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 diversified bond funds, then click here.
Virtus Multi-Sector Fixed-Income A (NAMFX - Free Report) seeks current income and preservation of capital. The fund utilizes at least 80% its assets to purchase a wide range of fixed income securities. It purchases U.S. government securities, investment-grade as well as high yield domestic debt securities. The diversified bond mutual fund returned 11.71% in the last one year period.
As of March 2011, this diversified bond mutual fund held 434 issues, with 1.49% of its total assets invested in Argentina Rep 8.28%
John Hancock Strategic Income A (JHFIX - Free Report) invests in foreign debt securities of developed and emerging markets, U.S. government and agency securities and U.S. high yield bonds. The fund may also invest in preferred stock and other types of debt securities. The diversified bond mutual fund has a three year annualized return of 11.53%.
The diversified bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.85% compared to a category average of 1.15%.
Federated Strategic Income A (STIAX - Free Report) seeks high current income. The fund invests in three major categories of fixed-income securities. These include domestic securities rated below investment grade as well as those rated higher and foreign securities. The diversified bond mutual fund returned 9.74% in the last one year period.
Joseph M. Balestrino is the fund manager and has managed this diversified bond mutual fund since 1996.
Columbia Strategic Income A (COSIX - Free Report) invests in three categories of debt securities. These include, U.S. government bonds and assets backed securities; foreign securities, including those issued from emerging markets and corporate debt rated below investment grade. The diversified bond mutual fund has a five year annualized return of 7.43%.
The diversified bond mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.00% compared to a category average of 1.15%.
Oppenheimer Global Strategic Income A (OPSIX - Free Report) seeks a high level of current income. It invests the majority of its assets in securities issued by the US government and high yield domestic and foreign securities. The diversified bond mutual fund returned 10.9% in the last one year period.
Arthur K. Steinmetz is the fund manager and has managed this diversified bond mutual fund since 1989.
To view the Zacks Rank and past performance of all diversified bond mutual funds, then click here.
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.