Diversified bond funds provide investors with a convenient and affordable option to hold a portfolio of bonds from different economic sectors. The costs incurred to create a portfolio of individual bonds would be significantly higher than investing in this class of funds. The associated risk also undergoes a decline since volatility in a specific sector has only a partial effect on the fund’s fortunes. The opportunity to reinvest the income generated and a relatively higher level of liquidity also make them secure and attractive investments.
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.
Hartford Strategic Income A (HSNAX) seeks current income with a secondary objective of capital growth. The fund primarily invests in debt securities rated below investment grade as well as foreign securities including those issued from emerging markets. The diversified bond mutual fund returned 16.99% over the last one year period
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 1.13%.
Federated Strategic Income A (STIAX) 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. Not more than 50% of its assets may be invested in any single category. The diversified bond mutual fund has a three year annualized return of 8.4%.
Joseph M. Balestrino is the fund manager and has managed this diversified bond mutual fund since 1996.
Invesco Van Kampen Core Plus Fixed Income A (VCPAX) seeks current income as well capital appreciation. At least 80% of the fund’s assets are invested in fixed income securities. It primarily purchases U.S. government, mortgage and debt securities. The diversified bond mutual fund returned 19.04% over the last one year period.
The diversified bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.75% compared to a category average of 0.94%.
Fidelity Strategic Income (FSICX) invests heavily in debt securities, including those rated relatively lower. High yield debt, U.S government securities and corporate securities constitute the fund’s major investments. The diversified bond mutual fund has a five year annualized return of 7.48%.
As of March 2010, this diversified bond mutual fund held 1141 issues, with 4.16% of its total assets invested in Fidelity Revere Str Tr.
ING Intermediate Bond A (IIBAX) seeks current income as well as preservation of capital and liquidity. The majority of its assets are invested in a portfolio the lion’s share of which consists of corporate, government and mortgage bonds rated investment grade. The diversified bond mutual fund has a ten year annualized return of 6.05%.
Christine Hurtsellers is the fund manager and has managed this diversified bond mutual fund since 2009.
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 http://www.zacks.com/funds/mutualfund/
