3 Top Ranked Short-Term Government Bond Mutual Funds to Outperform - Mutual Fund Commentary
Mutual funds investing in debt securities are among the most secure investment options which provide regular income while protecting capital invested. Funds which are part of this category bring a great deal of stability to portfolios with a large proportion of equity, 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. Meanwhile, a short-term government bond fund is a mutual fund that's limited, by its investment objectives and fund bylaws to investing primarily in short-term obligations of the federal government or its agencies. Depending on the fund's definition, short-term can be up to five years.
Below we will share with you 3 top short-term government bond mutual funds. Each has earned either a Zacks #1 Rank (Strong Buy) or a Zacks #2 Rank (Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all short-term government bond funds, investors can click here to see the complete list of funds.
Vanguard Short-Term Federal Investor (VSGBX) seeks current income with minimum price volatility. VSGBX invests a lion’s share of its assets in short-term bonds that are affiliated by the U.S. government or by its agencies. VSGBX may invest in bonds that are not approved by the U.S. government. VSGBX is expected to have a dollar-weighted average maturity duration between 1 and 4 years. The Vanguard Short-Term Federal Investor mutual fund returned 1.5% over the last one year period.
Brian W. Quigley is the fund manager and has managed this fund since January 2015.
Western Asset Short-Term Bond A (SBSTX) invests a large chunk of its assets in fixed income instruments that are rated "investment grade". These securities include corporate debt securities, mortgage-backed securities and derivatives that are approved by the U.S. government and its entities. SBSTX may invest a maximum of one-fourth of its assets in foreign securities that are denominated in U.S. dollar. The Western Asset Short-Term Bond A mutual fund returned 1% over the last one year period.
As of March 2015, SBSTX held 490 issues with 8.16% of its assets invested in Us 2yr Note (Cbt) Jun15 Xcbt 20150630.
American Century Short-Term Government Investor (TWUSX) seeks a high level of current income. TWUSX invests a major portion of its assets in short-term debt securities issued by the U.S. government. TWUSX may also allocate a significant share of its assets in investment-grade debt securities, which include debt securities of domestic companies, mortgage-backed securities of foreign government and other fixed income instruments. The American Century Short-Term Government Investor mutual fund returned 0.8% over the last one year period.
The fund has an expense ratio of 0.55% as compared to category average of 0.81%.
To view the Zacks Rank and past performance of all short-term government bond mutual funds, investors can click here to see the complete list of funds.
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