Mutual funds investing in debt securities are among the most secure investment options which provide regular income while protecting capital invested. Mutual Funds of this nature bring a great deal of stability to portfolio which a large proportion of equity, while providing dividends more frequently than individual bonds. U.S government bond mutual funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor.
Below we will share with you 5 top rated government bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform its peers in the future. To view the Zacks Rank and past performance of all government bond funds, then click here.
Oppenheimer US Government A (OUSGX) invests primarily in debt securities issued by the U.S. government. Securities issued or guaranteed by the U.S. treasury are among its major investments. The fund also invests heavily in mortgage related derivatives. The government bond mutual fund returned 9.95% over the last one year period.
The Fund Manager is Peter A. Strzalkowski and he has managed this government bond mutual fund since 2009.
Vanguard Long-Term Treasury Investor (VUSTX) seeks current income which is appreciable and sustainable. At least 80% of its assets are used to purchase securities issued by the U.S. Treasury, including bills, bond and notes. It usually holds a portfolio with an average weighted maturity period of 15 to 30 years. The fund has a three year annualized return of 9.77%.
The government bond mutual fund has a minimum initial investment of $3,000 and an expense ratio of 0.25% compared to a category average of 0.92%.
Putnam American Government Income A (PAGVX) invests at least 80% of its assets are used to purchase U.S. government securities. Up to 20% of its assets are invested in securities issued by private issuers and money market funds. The government bond fund returned 13.54% over the last one year period.
As of June 2010, this government mutual bond fund held 412 issues, with 29.75% of its total assets invested in GNMA 5%.
T. Rowe Price US Treasury Long-Term (PRULX) seeks high current income. The fund invests at least 85% of its assets in U.S Treasury securities. The balances of its funds are used to purchase other securities issued by the U.S. government. The average weighted maturity generally ranges from 15 and 20 years, but may range from 10 to 30 years. The fund has a ten year annualized return of 6.74%.
Brian J. Brennan is the fund manager and has managed this government bond mutual fund since 2003.
Managers Intermediate Duration Government (MGIDX) invests the majority of its assets are used to purchase bonds issued by the U.S. Government and its agencies. It may also invest in synthetic instruments having similar characteristics. The government bond fund returned 12.54% over the last one year period.
The government bond mutual fund has an expense ratio of 0.89% compared to a category average of 1.00%.
To view the Zacks Rank and past performance of all government 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 http://www.zacks.com/funds/mutualfund/
