For investors looking at parking their funds with bonds, U.S.
government securities are probably the safest possible
investments in the category. Default risk is almost non-existent
in this case, thought the trade-off is that the yields on such
instruments are consequentially lower, a price for the quality of
the investments. Moreover, interest payments on many treasury
securities are exempt from local and state taxes.
Consequentially, mutual funds holding government securities are
the safest bond funds and a natural choice for the risk
averse.
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
.
Wasatch-Hoisington US Treasury
(WHOSX) seeks return higher than the inflation rate over a
business cycle. The fund invests at least 90% of its assets in
U.S Treasury securities and repurchase agreements backed by such
instruments. The fund also purchases long term U.S. Treasury
Bonds. The government bond mutual fund returned 26.2% over the
last one year period.
The government bond mutual fund has a minimum initial
investment of $2,000 and an expense ratio of 0.75% compared to a
category average of 0.83%.
Vanguard Long-Term Treasury Investor
(VUSTX) utilizes a large share of its assets to purchase
securities issued by the U.S. Treasury, including bills, bond and
notes. The fund aims at maintaining a weighted average maturity
period of 15 to 30 years. The government bond mutual fund
returned 19.41% over the last one year period.
The Fund Manager is David R. Glocke and he has managed this
government bond fund since 2001.
ProFunds US Government Plus
(GVPSX) seeks daily returns which are 1.25 times the daily price
movement of the most recently issued Long Bond. The fund
purchases domestic government bonds and derivatives that provide
such daily returns. The government bond mutual fund returned
27.9% over the last one year period.
As of April 2012, this government bond mutual fund held 7
issues, with 21.26% of its total assets invested in US Treasury
Bond 3.125%.
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
29.72% over the last one year period.
The Fund Manager is Ryan A. Harder and he has managed this
government bond fund since 2008.
Fidelity Spartan Long-Term Treasury Bond Index
(FIBAX) invests the majority of its assets in securities which
are part of the Barclays Capital U.S. 5-10 Year Treasury Bond
Index. The dollar-weighted average maturity period of the
portfolio ranges from three to ten years. The government bond
mutual fund returned 10.17% over the last one year period.
As of June 2012, this government bond mutual fund held 56
issues, with 4.72% of its total assets invested in US Treasury
Bond 2.625%.
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
(FIBAX): ETF Research Reports
(GVPSX): ETF Research Reports
(RYGBX): ETF Research Reports
(VUSTX): ETF Research Reports
(WHOSX): ETF Research Reports
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