The international bond market has come to represent a particularly lucrative opportunity for investors. Though the U.S. bond market continues to attract investors, it is featured infrequently among the best performing international markets. Today, international markets represent more than half of the world’s fixed income investment opportunities. Further, the presence of foreign fixed income securities in a portfolio helps protect capital invested against currency fluctuations. With their widely diversified holdings, mutual funds offer a secure route to investing in the international bond market.
Below we will share with you 5 top rated international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all international bond funds, investors can click here to see the complete list of funds.
GMO Emerging Country Debt IV (GMDFX) seeks total return higher than its benchmark, the J.P. Morgan Emerging Markets Bond Index Global. The fund focuses on investing in sovereign debt of developing markets but it can also invest in entities related or not related to the emerging countries. The international bond mutual fund returned 12.56% in the last one year period.
The international bond mutual fund has an expense ratio of 0.54% compared to a category average of 1.27%.
Consulting Group International Fixed Income (TIFUX) invests the majority of its assets in non-dollar denominated debt securities. The fund focuses on acquiring securities rated investment grade. Not more than 15% of its assets may be utilized to purchase securities rated below investment grade. The international bond mutual fund returned 7.47% in the last one year period.
As of November 2011, this international bond mutual fund held 251 issues, with 6.13% of its total assets invested in Bundesobligation, 2.250% Due.
Federated Emerging Market Debt A (IHIAX) seeks high current income. The fund invests the majority of its assets in debt securities issued from emerging markets. These securities may be dollar-denominated or may be issued in foreign currencies. The international bond mutual fund returned 10.21% in the last one year period.
Roberto Sanchez-Dahl is the fund manager and he has managed this international bond mutual fund since 2001.
Fidelity New Markets Income (FNMIX) invests a large proportion of its assets in emerging market securities and other instruments related to such markets. The fund may also invest in other instruments and is non-diversified. The international bond mutual fund returned 11.35% in the last one year period.
The international bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.88% compared to a category average of 1.27%.
Columbia Emerging Markets Bond A (REBAX) seeks both capital growth and income. The fund invests the majority of its assets in fixed income securities issued from emerging markets. Not more than one-fourth of its assets may be utilized to purchase instruments issued by any single foreign government. The international bond mutual fund returned 9.98% in the last one year period.
Jim Carlen is the fund manager and he has managed this international bond mutual fund since 2008.
To view the Zacks Rank and past performance of all international bond mutual funds, investors can click here to see the complete list of funds.
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.
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