Diversified bond funds offer investors a convenient and affordable method of creating a well-diversified portfolio of bonds from different categories. The cost of putting together a portfolio of bonds through individual purchases would be significantly than using the fund-route. Subsequently, the associated risk also undergoes a decline since volatility in a specific sector has only a partial effect on the fund’s fortunes. The opportunity to reinvest the income generated and a relatively higher level of liquidity also make them secure and attractive investments.
Below we will share with you 5 top rated diversified 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 diversified bond funds, then click here.
T. Rowe Price Spectrum Income (NASDAQ:RPSIX - News) seeks high current income with relatively modest changes in share price levels. The fund invests in a wide range of T. Rowe Price mutual funds which invest in different market segments. The diversified bond mutual fund returned 11.27% in the last one year period.
Edmund M. Notzon, III is the fund manager and he has managed this diversified bond mutual fund since 1998.
Columbia Strategic Income A (NASDAQ:COSIX - News) invests in three categories of debt securities. These include, U.S. government bonds and assets backed securities; foreign securities, including those issued from emerging markets and corporate debt rated below investment grade. The diversified bond mutual fund has a three year annualized return of 8.17%.
The diversified bond mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.00% compared to a category average of 1.16%.
Federated Strategic Income A (NASDAQ:STIAX - News) seeks high current income. The fund invests in three major categories of fixed-income securities. These include domestic securities rated below investment grade as well as those rated higher and foreign securities. Not more than 50% of its assets may be invested in any single category. The diversified bond mutual fund returned 12.11% in the last one year period.
Joseph M. Balestrino is the fund manager and has managed this diversified bond mutual fund since 1996.
Fidelity Strategic Income (NASDAQ:FSICX - News) invests heavily in debt securities, including those rated relatively lower. High yield debt, U.S government securities and corporate securities constitute the fund’s major investments. The diversified bond mutual fund has a five year annualized return of 8.54%.
As of December 2010, this diversified bond mutual fund held 1223 issues, with 2.80% of its total assets invested in Fidelity Revere Str Tr.
Oppenheimer Global Strategic Income A (NASDAQ:OPSIX - News) seeks a high level of current income. It invests the majority of its assets in securities issued by the US government and high yield domestic and foreign securities. The diversified bond mutual fund returned 13.95% in the last one year period.
The diversified bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.95% compared to a category average of 1.16%.
To view the Zacks Rank and past performance of all diversified bond mutual funds, then click here.
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 at http://www.zacks.com/funds.
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