The economic and political turmoil in the debt plagued Eurozone
area has caused a risk aversion climate among investors, thereby
increasing the demand for 'safe haven' investment avenues such as
Government Bonds. This has caused a decent rally in the Government
Bond market in the recent past leading to plummeting yields near
their all time lows. Moreover, given the sluggish economic growth
in most developed and emerging markets coupled with policy inaction
from central banks, it is clear that the 'flight to safety' for
investors is here to stay for quite some time. Government Bond
mutual funds, with their diversified exposure provide stability of
capital invested along with a scope of earning regular interest
income.
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
.
T. Rowe Price US Treasury Long-Term
(
PRULX
) invests at least 85% of its assets in U.S Treasury securities
which have the maximum credit protection backed by the Federal
Government. The fund targets the longer end of the yield curve with
the portfolio weighted average maturity period forecasted in the
range of 15 to 20 years. The government bond mutual fund returned
31.43% over the last one year period.
The Fund Manager is Brian J. Brennan and he has managed this
government bond fund since 2003.
Fidelity Spartan Long Term Treasury Bond Index
(
FLBIX
) seeks high levels of current income by investing at least 80% of
its assets in securities in the Barclays Capital U.S. Long Treasury
Bond Index. The fund strives for a dollar-weighted average maturity
of 10 years or more. The government bond mutual fund returned
32.29% over the last one year period.
The government bond mutual fund has a minimum initial investment
of $10,000 and an expense ratio of 0.20% compared to a category
average of 0.82%.
Rydex Government Long Bond 1.2x Strategy
(
RYGBX
) seeks returns which are 1.2x the returns of the long dated U.S
Treasury Bonds. The fund invests in a variety of derivative
instruments and U.S Government securities to match its investment
objective. The government bond mutual fund returned 49.36% over the
last one year period.
As of July 2012, this government bond mutual fund held 7 issues,
with 68.40% of its total assets invested in US Treasury Bond
3%.
Vanguard Long-Term Treasury Investor
(
VUSTX
) targets the longer end of the yield curve and invests in
securities issued by the U.S. Treasury. The fund aims at
maintaining a weighted average maturity period of 15 to 30 years
thereby making the fund more sensitive to interest rate movements.
The government bond mutual fund returned 32.36% over the last one
year period.
The government bond mutual fund has a minimum initial investment
of $3,000 and an expense ratio of 0.20% compared to a category
average of 0.82%.
Dreyfus US Treasury Long-Term
(
DRGBX
) seeks to maximize total returns by investing in at least 80% of
its net assets in the U.S Treasury securities. The fund has an
effective duration of 7.5 years and seeks to maintain a portfolio
weighted average maturity of more than or equal to 10 years. The
government bond mutual fund returned 31.94% over the last one year
period.
The Fund Manager is Robert Bayston and he has managed this
government bond fund since 2008.
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 at
http://www.zacks.com/funds
.
View All Zacks #1 Ranked Mutual Funds
(DRGBX): ETF Research Reports
(FLBIX): ETF Research Reports
(PRULX): ETF Research Reports
(RYGBX): ETF Research Reports
(VUSTX): ETF Research Reports
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