Top 5 Highest Yielding Zacks #1 Ranked Government Bond Mutual Funds

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Government bond mutual funds are considered to be the safest class of investments in the bond fund category. These funds generally hold a portfolio of securities issued by the US Treasury and other government agencies which have negligible default risk. As a result, yields from these instruments are typically low along with low levels of associated risk. By holding widely diversified portfolios of these instruments, mutual funds contribute significantly to the safety associated with them.

Below we will share with you the 5 highest yielding Zacks #1 ranked government 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 government bond funds, investors can click here to see the complete list of funds.

Mutual Fund

Sec 30 Day Yield

PIMCO Real Return A

4.27%

Franklin Real Return A

2.73%

Western Asset Mortgage Backed Securities A

2.18%

Hussman Strategic Total Return

2.00%

Hussman Strategic Total Return

2.00%

 
PIMCO Real Return A (PRTNX) invests heavily in bonds issued by U.S. and foreign governments and related agencies which provide returns higher than the inflation rate over a business cycle. It predominantly invests in securities rated investment grade. The government bond mutual fund returned 7.08% over the last one year period.

The government bond mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.85% compared to a category average of 0.82%.

Franklin Real Return A (FRRAX) seeks total return higher than the inflation rate over a business cycle. The fund utilizes a large share of its assets to purchase investment grade debt instruments. A maximum of 20% of its assets may be invested in debt instruments rated below investment grade. The government bond mutual fund returned -3.91% over the last one year period.

As of March 2013, this government bond mutual fund held 205 issues, with 10.99% of its total assets invested in US Treasury Note 1.25%.

Western Asset Mortgage Backed Securities A (SGVAX) invests the majority of its assets in mortgage backed securities. These may be issued by agencies such as the Government National Mortgage Association (Ginnie Mae) as well as government sponsored agencies. The government bond mutual fund returned 6.53% over the last one year period.

The Fund Manager is Stephen Walsh and he has managed this government bond fund since 2006.

Direxion Monthly 10 Year Note Bull 2X (DXKLX) seeks monthly returns which are 2x the returns of the NYSE Current 10-Year U.S. Treasury Index. The fund invests a large share of its assets in domestic government securities that may consist of index and financial securities to create long positions. The government bond mutual fund returned 10.37% over the last one year period.

The government bond mutual fund has an expense ratio of 1.90% compared to a category average of 0.82%.

Hussman Strategic Total Return (HSTRX) invests heavily in fixed income instruments. These instruments are primarily securities issued by the U.S. Treasury, including bills, bond and notes. It may also invest in Treasury inflation-protected securities (TIPS). The government bond mutual fund returned -0.20% over the last one year period.

The Fund Manager is John P. Hussman and he has managed this government bond fund since 2002.

To view the Zacks Rank and past performance of all government 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.

Read the analyst report on PRTNX

Read the analyst report on FRRAX

Read the analyst report on SGVAX

Read the analyst report on DXKLX

Read the analyst report on HSTRX

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