5 Strong Buy Government Bond Mutual Funds Set to Outperform - Best of Funds

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Mutual funds investing in debt securities are among the most secure investment options which provide regular income while protecting capital invested. Funds which are part of this category bring a great deal of stability to portfolios with a large proportion of equity, while providing dividends more frequently than individual bonds. U.S. government bonds funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor.

Below we will share with you 5 top rated government 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 government bond funds, investors can click here to see the complete list of funds .

Lord Abbett Income A (LAGVX) invests 65% of its assets in investment grade instruments which include U.S. government affiliated securities, domestic and foreign debt instruments and mortgage related securities. It may also invest in derivatives such as forwards, futures, options and swaps. The government bond mutual fund returned 9.6% over the last one year period.

The fund has an expense ratio of 0.78% as compared to category average of 0.88%.

Sentinel Total Return Bond A (SATRX) seeks high return from a combination of capital growth and current income. The fund invests predominantly in different kinds of fixed-income securities regardless of its duration. Half of its assets may be invested in junk bonds. The government bond mutual fund returned 7.6% over the last one year period.

Jason Doiron is the fund manager and has managed this fund since 2010.

Rydex Government Long Bond 1.2x Strategy Investor (RYGBX) invests largely in U.S. government backed fixed income instruments as well as derivative instruments such as future contracts, swaps and options. It seeks 1.2 times the return of daily price movement of the Long Treasury Bond for U.S. government instruments. This non-diversified government bond mutual fund returned 14.9% over the last one year period.

As of July 2014, this fund held 5 issues with 85.76% of its assets invested in US Treasury Bond 3.375%.

Wasatch-Hoisington US Treasury (WHOSX) seeks to provide returns than beat the inflation rate. It invests 90% of its assets in U.S. Treasury securities. Its maturity and duration are adjusted based on HIMCO's analysis of factors such as interest rates and economic conditions. The government bond mutual fund returned 13% over the last one year period.

The fund has an expense ratio of 0.71% as compared to category average of 0.56%.

AMG Managers Intermediate Duration Government (MGIDX) invests a majority of its assets in debt securities of domestic government or other agencies authorized by the government. It invests in securities having impressive credit quality to reduce risk. The fund seeks total return higher than that of the mortgage related indices. The government bond mutual fund returned 5% over the last one year period.

Daniel R. Adler is the fund manager and has managed this fund since 2003.

To view the Zacks Rank and past performance of all government 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 in our Mutual Fund Center .


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Mutual Funds


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