Today we are featuring top-performing “Convertible” fixed income mutual funds, which primarily invest in convertible securities in search of growth and/or income.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Convertible Fixed Income Funds.

3 Solid Picks

Davis Appreciation & Income A (RPFCX) was incepted in May 1992. The investment seeks total return through combination of growth potential of stocks with the income of bonds.

The fund primarily invests in a diversified portfolio of stocks, bonds, convertible securities and preferred securities that provide investors with lower volatility and helps in building long-term wealth.

The fund seeks to purchase durable, well-managed businesses at value prices and hold them for the long term. As of March 2009, its portfolio turnover was 27.60%.

Franklin Convertible Securities A (FISCX) seeks to maximize total return by investing primarily in convertible securities.

The fund generally invests in bonds or preferred stocks that may be converted within a specified period of time into a set amount of common stock at a pre-stated price. It may not invest more than 10% of assets in securities rated below B or in unrated securities of comparable quality.

Alan Muschott has been lead manager at the fund since July 2002. It has an expense ratio of 0.89%.

Putnam Convertible Income-Growth A (PCONX) seeks, with equal emphasis, current income and capital appreciation. Its secondary objective is conservation of capital.

The fund typically invests a significant portion of assets in convertibles that are rated below investment grade. It focuses mainly in midsize and large companies.

Unit holders have to make a minimum initial investment of $500 to enter this Zacks#1 Rank (“Strong Buy”) fund. It distributes dividends quarterly and capital gains, if any, annually.

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Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

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.


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