Conservative investors prefer debt instruments not only because they safeguard the capital invested but also for the regular income flows they provide. Bonds bring a great deal of stability to an equity-heavy portfolio while providing dividends more frequently than individual bonds. U.S government bonds funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor.
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.
Rydex Government Long Bond 1.2x Strategy (RYGBX) seeks to return 120% of the daily returns of the Long Treasury Bond for U.S. government securities. The fund invests in both domestic government bonds and derivatives such as futures, interest rate swaps and options. The government bond mutual returned 10.14% over the last one year period.
The government bond mutual fund has an expense ratio of 0.95% compared to a category average of 0.82%.
T. Rowe Price US Treasury Long-Term (PRULX) invests a minimum of 85% of its assets in U.S. Treasury securities. The balance is utilized to purchase other U.S. government securities. The fund targets an average weighted maturity period which ranges from 15 to 20 years. The government bond mutual fund returned 6.50% over the last one year period.
As of March 2013, this government bond mutual fund held 86 issues, with 9.52% of its total assets invested in U.S. Treasury Bond 4.375%
ProFunds US Government Plus (GVPSX) seeks daily returns which are 1.25 times that of the latest 30 years U.S. Treasury Bond, prior to fees and expenses. The fund purchases securities and invests in derivatives which can provide such returns. The government bond mutual fund returned 7.30% over the last one year period.
The Fund Manager is Michelle Liu and he has managed this government bond fund since 2009.
Fidelity Spartan Long-Term Treasury Bond Index (FLBAX) invests the majority of its assets in securities which make up the Barclays Capital U.S. Long Treasury Bond Index. The fund has a dollar weighted average maturity period of 10 years or higher. The government bond mutual fund returned 7.12% over the last one year period.
The government bond mutual fund has an expense ratio of 0.10% compared to a category average of 0.82%.
Vanguard Long-Term Treasury (VUSTX) seeks a high level of current income which is sustainable. The fund invests a large share of its assets in U.S. Treasury securities. It aims to have an average weighted maturity period between 15 to 30 years. The government bond mutual fund returned 5.24% over the last one year period.
The Fund Manager is David R. Glocke and he has managed this government bond fund since 2001.
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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