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, diversified bond funds are preferred over 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 top-ranked diversified bond mutual funds, viz., PGIM Absolute Return Bond PADAX, Goldman Sachs Strategic Income Fund GSZAX and Ave Maria Bond AVEFX. 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.
PGIM Absolute Return Bond fund seeks positive returns regardless of the market conditions by investing most of its assets along with borrowings, if any, in debt securities and investments that provide exposure to bonds. PADAX advisors may also invest in debt securities rated below investment or junk bonds.
PGIM Absolute Return Bond fund has three-year annualized returns of 3.5%. Richard Piccirillo has been one of the fund managers of PADAX since the end of August 2011.
Goldman Sachs Strategic Income Fund invests most of its assets in a diversified portfolio of domestic and foreign investment grade and non-investment grade fixed-income securities.
Goldman Sachs Strategic Income Fund has three-year annualized returns of 3.6%. GSZAX has an expense ratio of 1.04%.
Ave Maria Bond invests in investment-grade debt securities of domestic issuers, including the U.S. government and its agencies and instrumentalities, corporations and municipalities and money market instruments. AVEFX may invest part of its net assets in preferred stocks, common stocks paying dividends and securities convertible into common stock
Ave Maria Bond has three-year annualized returns of 2.7%. As of the end of June 2024, AVEFX had 27.4% of its assets invested in Miscellaneous Bonds.
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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