Zacks #1 Ranked Government Bond Mutual Funds - Best of Funds

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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 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 .

PL Income A (PLIAX) invests 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 5.36% over the last one year period.

David R. Weismiller is the fund manager and has managed this fund since 2010.

Waddell & Reed Government Securities A (UNGVX) seeks current income with capital preservation by investing in various domestic government securities. The fund also invests in mortgaged-backed securities of US government agencies and has no restriction while investing on the various maturities of debt securities. The government bond mutual fund returned -1.02% over the last one year period.

The fund has an expense ratio of 1.00% as compared to category average of 0.95%.

JHancock Investment Grade Bond A (TAUSX) invests a lion's share in investment grade bonds irrespective of their date of maturity. It may also invest in other securities including futures and options, among others, for gaining market exposure and high return. The government bond mutual fund returned 3.27% over the last one year period.

As of April 2014, this fund held 400 issues with 4.75% of its assets invested in U.S. Treasury Note 2.75%.

Putnam American Government Income A (PAGVX) seeks substantial current income. A large share of the fund's assets is utilized to purchase bonds as well as asset backed debt securities that are issued by the U.S. government and also by its agencies. The fund may also invest in derivatives. The government bond mutual fund returned 3.82% over the last one year period.

The fund has an expense ratio of 0.87% as compared to category average of 0.95%.

MassMutual Select Strategic Bond A (MSBAX) invests largely in fixed income securities which are denominated in U.S. dollars and debt securities of both U.S and non U.S. institutions which are backed by the domestic government. It also invests in money market securities and mortgage backed instruments. The government bond mutual fund returned 4.53% over the last one year period.

As of March 2014, this fund held 670 issues with 28.50% of its assets invested in 90day Eur Futr Dec16 Xcme 20161219.

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.

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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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