Conservative investors prefer debt instruments not only
because they safeguard the capital invested but also for the
regular income flows they provide. Bonds bring a great deal of
stability to an equity-heavy portfolio 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
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) seeks high return along with capital preservation. A
minimum of 65% of its assets are invested in debt securities
backed by the U.S. Government. It also invests in derivatives.
The government bond mutual has returned 2.44% over the last one
The fund has an expense ratio of 0.78% as compared to category
average of 0.86%.
Western Asset Mortgage Backed Securities A
(SGVAX) invests a lion's share of its assets in mortgage-backed
securities of government authorized institutions such as Federal
National Mortgage Association (Fannie Mae), Federal Home Loan
Mortgage Corporation (Freddie Mac) and Government National
Mortgage Association (Ginnie Mae). Investments can be made in
securities irrespective of their maturity period. The government
bond mutual fund returned 1.95% over the last one year
S. Leech is the fund manager and has managed this fund since
Managers Intermediate Duration Government
(MGIDX) invests 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 government bond mutual fund returned
1.01% over the last one year period.
As of March 2014, this fund held 309 issues with 13.42% of its
assets invested in Freddie Mac Gold Single Family TBA.
T. Rowe Price US Treasury Long-Term
(PRULX) invests a minimum of 85% of its assets in securities of
U.S. Treasury which are guaranteed by the U.S. government. It
also invests in other securities which are issued or authorized
by the government. The fund targets a maturity range from 15 to
20 years. The government bond mutual fund returned -7.28% over
the last one year period.
The fund has an expense ratio of 0.52% as compared to category
average of 0.56%.
PL Income A
(PLIAX) seeks high return. It invests in a minimum of 60% of its
assets in corporate debt securities of foreign institutions that
are denominated in U.S. dollars. It also invests in securities of
domestic government and other authorized institutions. It may
also invest a maximum of 40% in junk bonds. The government bond
mutual fund returned -1.90% over the last one year period.
David R. Weismiller is the fund manager and has managed this
fund since 2010.
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
View All Zacks #1 Ranked Mutual Funds
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