Conservative investors prefer debt instruments not only because they safeguard the capital invested but also for the regular income flows they provide. Bonds bring a great deal of stability to an equity-heavy portfolio while providing dividends more frequently than individual bonds. U.S government bonds 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 their peers in the future. To view the Zacks Rank and past performance of all government bond funds, then click here.
RidgeWorth US Government Securities A (SCUSX) seeks current income and preservation of capital invested. The fund invests the majority of its assets in government securities as well as money market mutual funds. It concentrates on investing in mortgage-backed instruments. The government bond mutual fund has a three year annualized return of 5.98%.
The government bond mutual fund has a minimum initial investment of $2,000 and an expense ratio of 0.93% compared to a category average of 0.98%.
SunAmerica US Government Securities A (SGTAX) invests a large proportion of its assets in domestic government securities with varying maturity periods. These securities include bills notes bonds and other debt securities issued the U.S. Treasury or other government agencies. The government bond mutual fund returned 5.43% over the last one year period.
Michael Cheah is the fund manager and he has managed this government bond mutual fund since 1999.
ISI Total Return US Treasury (TRUSX) seeks both capital growth and current income, which is a secondary objective. The fund invests heavily in U.S Treasury securities and repurchase agreements backed by such instruments. The government bond mutual fund has a ten year annualized return of 5.42%.
The government bond mutual fund has a minimum initial investment of $5,000 and an expense ratio of 0.82% compared to a category average of 0.98%.
T. Rowe Price US Treasury Long-Term (PRULX) 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 government bond mutual fund has a five year annualized return of 9.35%.
As of September 2011, this government bond mutual fund held 86 issues, with 9.10% of its total assets invested in US Treasury Bond 4.625%.
Dreyfus US Treasury Long-Term (DRGBX) seeks current income and capital growth. The fund invests a substantially high proportion of its assets in securities issued or guaranteed by the U.S. government or its agencies. The government bond mutual fund returned 15.58% over the last one year period.
Robert Bayston is the fund manager and he has managed this government bond mutual fund since 2005.
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.
View All Zacks #1 Ranked Mutual Funds
Zacks Investment Research
