Mutual funds having significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.
Moreover, investing in diversified bond funds is preferred to individual bond investing, as building a portfolio of the second type may prove relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive.
Below, we share with you three diversified bond mutual funds, viz., MassMutual Short Duration Bd MSTDX, Virtus Newfleet Multi-Sector S/T Bd NARAX and DWS Short Duration DBPIX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
MassMutual Short Duration Bd fund seeks to achieve a high total rate of return primarily from current income while minimizing fluctuations in capital values by investing primarily in a diversified portfolio of short-term investment-grade fixed income securities. MSTDX advisors invest in money market securities, including commercial paper.
MassMutual Short Duration Bd has three-year annualized returns of 7%. Stephen Ehrenberg has been the fund manager of MSTDX since November 2019.
Virtus Newfleet Multi-Sector S/T Bd fund seeks to achieve its objective by investing in a diversified portfolio of primarily short-term fixed income securities having an expected weighted average maturity of three years or less. NARAX advisors also invest in investment-grade securities, which are rated at the time of investment BBB or above by Standard and Poor's Corporation, or Duff & Phelps Credit Rating Company or Baa or above by Moody's Investors' Services, or unrated, which, according to the fund's portfolio managers, are of comparable quality.
Virtus Newfleet Multi-Sector S/T Bd has a three-year annualized return of 6.4%. As of June2025, NARAX had 76.1% of its assets invested in Total Misc Bonds.
DWS Short Duration fund seeks a high level of current income while seeking to maintain a stable value per share. DBPIX advisors employ a global asset allocation strategy, which invests in instruments across domestic and international fixed income and currency markets.
DWS Short Duration fund has three-year annualized returns of 5.9%. DBPIX has an expense ratio of 0.50%.
To view the Zacks Rank and the past performance of all diversified bond mutual funds, investors can click here to see the complete list of diversified bond mutual funds.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
