Top 5 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 that have negligible default risk. As a result, yields from these instruments are typically low, as are the 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 5 top rated 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.

Fidelity Spartan Short-Term Treasury Bond Index Advantage (FSBAX) invests the majority of its assets in securities which make up the Barclays U.S. 1-5 Year Treasury Bond Index. The fund aims to have an average maturity period which may at most be three years. The government bond mutual has a five year annualized return of 1.79%.

The government bond mutual fund has an expense ratio of 0.10% compared to a category average of 0.86%.

Putnam American Government Income A (PAGVX) seeks substantial current income. A large share of the fund’s assets is utilized to purchase bonds and asset backed debt securities issued by the U.S. government and its agencies. It may also invest in derivatives. The government bond mutual has a five year annualized return of 7.89%.

As of September 2013, this government bond mutual fund held 242 issues, with 10% of its total assets invested in FNMA 4%.

Managers Intermediate Duration Government (MGIDX) invests a majority of its assets debt securities issued by the U. government or its agencies. The fund may utilize derivatives and other hybrid instruments to reduce risk or enhance return. The government bond mutual has a five year annualized return of 5.92%.

The Fund Manager is Daniel R. Adler and she has managed this government bond fund since 2003.

LWAS/DFA Two-Year Government Portfolio (DFYGX) seeks appreciably high total return and preservation of capital. The fund invests heavily in government securities with a maturity period of two years. It may also invest in derivatives. The government bond mutual has a five year annualized return of 1.44%.

The government bond mutual fund has an expense ratio of 0.28% compared to a category average of 0.86%.

Homestead Short-Term Government (HOSGX) invests a majority of its assets in fixed-income securities that are backed by the U.S. government. The fund also invests a portion of its assets in municipal bonds, collateralized mortgage obligations, asset-backed securities, corporate bonds and money market securities. The government bond mutual has a five year annualized return of 2.02%.

The Fund Manager is Douglas G. Kern and he has managed this government bond fund since 1995.

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.

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