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 the 5 highest yielding Zacks #1 ranked diversified 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 diversified bond funds, then click here.
| Mutual Fund | SEC Yield |
| Victory Core Bond Index A | 5.3% |
| Aberdeen Core Fixed Income A | 3.5% |
| Delaware Pooled Core Plus Fixed Income | 3.5% |
| RidgeWorth Total Return Bond A | 3.3% |
| JPMorgan Core Bond A | 3.2% |
Victory Core Bond Index A (SIMIX) invests the majority of its funds in a portfolio of debt securities that expected to mimic the performance of the Barclays Capital US Aggregate Bond Index. The diversified bond mutual fund returned 4.68% in the last one year period.
The diversified bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.87% compared to a category average of 0.93%.
Aberdeen Core Fixed Income A (PCDFX) seeks capital growth and current income. The fund invests a large proportion of its assets in a wide range of fixed income securities. These instruments include domestic and foreign government securities, municipal and asset backed securities, corporate debt and asset backed instruments. The diversified bond mutual fund has a three year annualized return of 7%.
J. Gagnier is the fund manager and has managed this diversified bond mutual fund since 2010.
Delaware Pooled Core Plus Fixed Income (DCPFX) invests in three categories of debt securities. These include domestic investment grade bonds, domestic high yield bonds and foreign securities. The fund purchase securities denominated in any currency .The diversified bond mutual fund has a five year annualized return of 7.88%.
The diversified bond mutual fund has an expense ratio of 0.45% compared to a category average of 0.93%.
RidgeWorth Total Return Bond A (CBPSX) seeks total return higher than that provided by the domestic investment grade bond sector. The fund purchases securities rated investment grade by at least one domestic securities rating firm. The diversified bond mutual fund returned 6.2% in the last one year period.
As of September 2011, this diversified bond mutual fund held 230 issues, with 10.02% of its total assets invested in State Str Instl Invt Tr Treas Mmkt Fd Inst.
JPMorgan Core Bond A (PGBOX) invests a large proportion of its assets in debt. The fund primarily purchases bonds with intermediate and long term maturity periods. The average weighted maturity period of its portfolio varies from four to twelve years. The diversified bond mutual fund has a ten year annualized return of 5.65%.
Douglas S. Swanson is the fund manager and has managed this diversified bond mutual fund since 1991.
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.
