Investing in international bond funds is one of the best ways to balance losses incurred from US markets, since interest rate fluctuations differ from country to country. This is because they show little correlation with domestic equities and only moderate correlation with investment grade domestic debt. They also help in diversifying currency exposure and protecting assets against a long-term secular decline in the U.S. dollar. With their widely diversified holdings, mutual funds offer a secure route to investing in the international bond market.
Below we will share with you the 5 highest yielding Zacks #1 ranked international 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 international bond funds, investors can click here to see the complete list of funds.
|Mutual Fund||Sec 30 Day Yield|
|GMO Emerging Country Debt IV||5.11%|
|T. Rowe Price International Bond||1.66%|
|GMO Currency Hedged international Bond III||1.24%|
|BlackRock International Bond||1.22%|
|Invesco International Total Return A||1.05%|
GMO Emerging Country Debt IV (GMDFX) focusses on investing in emerging market debt securities. The fund seeks to achieve total returns which are greater than that of the J.P. Morgan EMBI Global, its benchmark index. The international bond mutual fund is non-diversified and has a five year annualized return of 21.01%.
The Fund Manager is Thomas F. Cooper and he has managed this international bond mutual fund since 1994.
T. Rowe Price International Bond (RPIBX) seeks capital growth and current income. The fund invests 65% of its assets in foreign securities which are rated among the three highest credit categories. A maximum of 20% of its assets must be utilized to purchase bonds rated below investment grade. Not more than 20% may be invested in foreign securities denominated in dollars. The international bond mutual fund has a five year annualized return of 6.20%.
As of September 2013, this international bond mutual fund held 490 issues, with 3.75% of its total assets invested in Japan (Govt Of) 2.3%.
GMO Currency Hedged international Bond III (GMHBX) invests a large proportion of its assets in bonds. The fund focuses on attaining returns higher than the J.P. Morgan Non-U.S. Government Bond (Hedged) (ex-Japan) Index. The international bond mutual fund is non-diversified and has a five year annualized return of 9.13%.
The international bond mutual fund has an expense ratio of 0.40% compared to a category average of 1.08%.
BlackRock International Bond (CIFIX) seeks total return. The fund focusses on investing in foreign securities which are not denominated in U.S. dollars. A minimum of 65% of its assets are invested in a wide range of securities issued from a minimum of three developed nations. The international bond mutual fund has a five year annualized return of 4.82%.
The Fund Manager is Scott Thiel and he has managed this international bond mutual fund since 2011.
Invesco International Total Return A (AUBAX) invests heavily in a wide range of foreign government and corporate debt instruments as well as in foreign currency. The fund may utilize derivatives to manage risk or enhance return. Not more than 30% of its assets may be utilized to purchase dollar-denominated securities. The international bond mutual fund has a five year annualized return of 5.81%.
The international bond mutual fund has an expense ratio of 1.10% compared to a category average of 1.08%.
To view the Zacks Rank and past performance of all international 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.