Top 5 Zacks#1 Ranked International Bond Funds

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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 5 top rated international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its 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.

GMO Emerging Country Debt IV (GMDFX) seeks total return higher than its benchmark, the J.P. Morgan Emerging Markets Bond Index Global. The fund focuses on investing in sovereign debt of developing markets but it can also invest in entities related or not related to the emerging countries. The international bond mutual fund returned 16.69% in the last one year period. 

The international bond mutual fund has an expense ratio of 0.54% compared to a category average of 1.26%.

Goldman Sachs Local Emerging Markets Debt A (GAMDX) invests a large proportion of its assets in emerging market securities issued by governments or corporations. Not more than 20% of its assets may be utilized to purchase fixed-income securities not issued from emerging markets and currency instruments.  The international bond mutual fund returned 7.72% in the last one year period.

The Fund Manager is Ricardo Penfold and he has managed this international bond mutual fund since 2008.

T. Rowe Price Emerging Markets Bond (PREMX) seeks to provide a high level of current income and invests heavily in emerging market debt securities. These could be both government securities and those issued by corporate entities. The international bond mutual fund returned 10.58% in the last one year period.

As of December 2011, this international bond mutual fund held 314 issues, with 8.51% of its total assets invested in Russian Federation 7.5%

Fidelity New Markets Income (FNMIX) invests a large proportion of its assets in emerging market securities and other instruments related to such markets. The fund may also invest in other instruments and is non-diversified. The international bond mutual fund returned 15.08% in the last one year period.

The international bond mutual fund has an expense ratio of 0.86% compared to a category average of 1.26%.

Columbia Emerging Markets Bond A (REBAX) seeks both capital growth and income. The fund invests the majority of its assets in fixed income securities issued from emerging markets. Not more than one-fourth of its assets may be utilized to purchase instruments issued by any single foreign government. The international bond mutual fund returned 13.33% in the last one year period. 

Jim Carlen is the fund manager and he has managed this international bond mutual fund since 2008.

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

Read the analyst report on GMDFX

Read the analyst report on GAMDX

Read the analyst report on PREMX

Read the analyst report on FNMIX

Read the analyst report on REBAX



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