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 are backed by the full faith and credit of the US government. Yields from these instruments are typically low but the associated risk is also much smaller. In addition, many of these instruments are exempt from state and local taxes. By holding widely diversified portfolios of these investments, 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

Vanguard Long-Term Treasury Investor

3.42%

Fidelity Spartan Long-Term Treasury Bond Index

3.27%

Transamerica Partners IPS

3.1%

Wasatch-Hoisington US Treasury

2.33%

T. Rowe Price US Treasury Long-Term

2.27%

 

Vanguard Long-Term Treasury Investor (VUSTX) utilizes the majority of its assets to purchase securities issued by the U.S. Treasury, including bills, bond and notes. The average maturity period of the portfolio varies between 15 to 30 years. The government bond mutual fund returned 28.16% over the last one year period.

The government bond mutual fund has a minimum initial investment of $3,000 and an expense ratio of 0.22% compared to a category average of 0.84%. 

Fidelity Spartan Long-Term Treasury Bond Index (FLBIX) seeks high current income. The fund invests a large share of its assets in securities which are part of the Barclays Capital U.S. Long Treasury Bond index. The government bond mutual fund returned 27.98% over the last one year period.

As of January 2012, this government bond mutual fund held 36 issues, with 6.10% of its total assets invested in US Treasury Bond 4.375%.

Transamerica Partners IPS (DVIGX) invests the majority of its assets in inflation-protected securities and related investments. The fund utilizes an underlying mutual fund to purchase these securities which are instruments issued by the U.S. government and its agencies. The government bond mutual fund returned 12.83% over the last one year period.

Martin Hegarty is the fund manager and has managed this government bond mutual fund since 2010.

Wasatch-Hoisington US Treasury (WHOSX) seeks to provide returns higher than the inflation rate in a business cycle. The fund invests at least 90% of its assets in U.S Treasury securities and repurchase agreements backed by such instruments. The government bond mutual fund returned 39.45% over the last one year period.

The government bond mutual fund has a minimum initial investment of $2,000 and an expense ratio of 0.75% compared to a category average of 0.84%.

T. Rowe Price US Treasury Long-Term (PRULX) invests at least 85% of its assets in U.S Treasury securities. The balances of its funds are used to purchase other securities backed by the credit of the U.S. government. The government bond mutual fund returned 27.11% over the last one year period.

Brian J. Brennan is the fund manager and has managed this government bond mutual fund since 2003.

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 at http://www.zacks.com/funds.

Read the analyst report on VUSTX

Read the analyst report on FLBIX

Read the analyst report on DVIGX

Read the analyst report on WHOSX

Read the analyst report on PRULX

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