International bonds represent a majority of the fixed-income investment opportunities available across the globe. Bonds issued from emerging economies and non-government entities are also part of this category. International bonds help to mitigate losses in the U.S. markets because interest rate fluctuations vary from country to country. This is because they show little correlation with domestic equities and only moderate correlation with investment grade domestic debt. Additionally, they help to diversifying currency exposure and protect assets against a long-term secular decline in the U.S. dollar
Below we will share with you the 5 highest yielding Zacks #1 ranked international 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 international bond funds, then click here.
| Mutual Fund | SEC Yield |
| GMO International Bond III | 20.34% |
| Pioneer Global High Yield A | 8.14% |
| SEI International Emerging Markets Debt A | 7.93% |
| Franklin Templeton Emerging Market Debt Opportunities | 7.39% |
| GMO Emerging Country Debt IV | 6.37% |
GMO International Bond III (GMIBX) seeks to outperform its benchmark, the J.P. Morgan Non-U.S. Government Bond index. The majority of the fund’s assets are utilized to invest in bonds, either directly or through other GMO funds or derivatives. The international bond mutual fund returned 17.82% in the last one year period.
The international bond mutual fund has an expense ratio of 0.38% compared to a category average of 1.14%.
Pioneer Global High Yield A (PGHYX) invests the majority of its assets in domestic and foreign high yield debt securities and preferred stocks. It invests in securities with any rating and a wide range of maturity periods. The international bond mutual fund returned 28.96% in the last one year period and has a five year annualized return of 6.09%.
The Fund Manager is Andrew Feltus and she has managed this international bond mutual fund since 2001.
SEI International Emerging Markets Debt A (SITEX) seeks both current income and capital growth. The fund invests a large share of its assets in fixed income emerging market securities. It focuses on dollar-denominated debt securities issued by governments and companies in emerging markets. The international bond mutual fund a three year annualized return of 8.95%.
As of September 2009, this international mutual bond fund held 297 issues, with 6.72% of its total assets invested in Russian Federation 7.5%.
Franklin Templeton Emerging Market Debt Opportunities (FEMDX) invests the majority of its assets in debt securities issued from emerging market countries. The fund invests without limit in debt securities rated below investment grade. The international bond mutual fund returned 26.94% over the last one year period.
The international bond mutual fund has an expense ratio of 1.04% compared to a category average of 1.34%.
GMO Emerging Country Debt IV (GMDFX) seeks current income along with capital growth. The majority of its assets are invested in emerging market debt securities issued by governments. It may also invest in companies with economic linkages to emerging markets and purchase foreign fixed-income securities. The international bond mutual fund has a ten year annualized return of 14.64%.
William F Nemerever is the fund manager and has managed this international bond mutual fund since 1994.
To view the Zacks Rank and past performance of all international 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/
