Top 5 Government Bond Mutual Funds - 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 portfolio which 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, then click here.

T. Rowe Price US Treasury Long-Term (PRULX) invests at least 85% of its assets in U.S Treasury securities. The balances of its funds are used to purchase other securities issued by the U.S. government. The government bond mutual fund returned 28.37% over the last one year period.

The government bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.55% compared to a category average of 0.84%.

Dreyfus US Treasury Long-Term (DRGBX) seeks current income and capital growth. The fund invests a substantially high proportion of its assets in securities issued or guaranteed by the U.S. government or its agencies. The government bond mutual fund returned 29.32% over the last one year period.

As of December 2011, this government bond mutual fund held 25 issues, with 15.41% of its total assets invested in US Treasury Bond 4.375%.

SunAmerica US Government Securities A (SGTAX) invests a large proportion of its assets in domestic government securities with varying maturity periods. These securities include bills notes bonds and other debt securities issued the U.S. Treasury or other government agencies. The government bond mutual fund returned 9.18% over the last one year period.

Michael Cheah is the fund manager and he has managed this government bond mutual fund since 1999.

Vanguard Long-Term Treasury Investor (VUSTX) seeks current income which is appreciable and sustainable. At least 80% of its assets are used to purchase securities issued by the U.S. Treasury, including bills, bond and notes. The government bond mutual fund returned 29.3% over the last one year period.

The government bond mutual fund has a minimum initial investment of $3,000 and an expense ratio of 0.22% compared to a category average of 0.84%.

Fidelity Spartan Long-Term Treasury Bond Index ( FLBIX) invests at least 80% of its assets in securities which are part of the Barclays Capital U.S. Long Treasury Bond index. The dollar-weighted average maturity period of the portfolio is at least 10 years or more. The government bond mutual fund returned 29.48% over the last one year period.

The Fund Manager is Curt Hollingsworth and he has managed this government bond fund since 2009.

To view the Zacks Rank and past performance of all government 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.


View All Zacks #1 Ranked Mutual Funds
 
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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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