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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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.
