Diversified bond funds provide investors with a convenient and affordable option to hold a portfolio of bonds from different economic sectors. The costs incurred to create a portfolio of individual bonds would be significantly higher than investing in this class of funds. The associated risk also undergoes a decline since volatility in a specific sector has only a partial effect on the fund’s fortunes. The opportunity to reinvest the income generated and a relatively higher level of liquidity also make these funds a secure and attractive investment.
Below we will share with you 3 best rated diversified 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 diversified bond funds, investors can click here to see the complete list of funds.
Fidelity Series Investment Grade Bond (FSIGX) seeks high current income over the long run. FSIGX invests a lion’s share of its assets in medium and high quality investment-grade debt securities. FSIGX is expected to maintain interest rate risk identical to the Barclays U.S. Aggregate Bond Index. FSIGX invests across a wide range of sectors with different maturity durations throughout the globe. FSIGX may also allocate a significant portion of its assets in lower-quality debt securities. The Fidelity Series Investment Grade Bond mutual fund has a five-year annualized return of 4.7%.
FSIGX has an expense ratio of 0.45% compared to a category average of 0.86%.
JPMorgan Core Bond A (PGBOX) generally invests in debt instruments having intermediate and long term maturity periods. PGBOX seeks to provide maximum total return by investing in debt securities including corporate bonds, U.S. treasury obligations and mortgage-backed securities. PGBOX is expected to have average weighted maturity of 4 to 12 years. The JPMorgan Core Bond A mutual fund has a five-year annualized return of 4.3%.
Douglas Swanson and Christopher Nauseda are the fund managers and they have managed this diversified bond mutual fund since 1991 and 2006, respectively.
Neuberger Berman Core Bond Investor (NCRIX) seeks maximum return with capital preservation. NCRIX maintains a diversified portfolio of fixed rate and floating rate debt securities. The fund includes securities affiliated by the U.S. and non-U.S. government, and trust structures. NCRIX generally invests in investment grade securities. NCRIX invests a maximum of 15% of its assets in securities that are not denominated in the U.S. dollar. NCRIX may opt for hedging strategies in order to restrict its foreign currency exposure to 5% of its assets. The Neuberger Berman Core Bond Investor mutual fund has a five-year annualized return of 4.2%.
As of February 2015, NCRIX held 415 issues, with 13.88% of its total assets invested in New Zeal 3mo Bill Dec15 Xsfe 20151216.
To view the Zacks Rank and past performance of all diversified bond mutual funds, investors can click here to see the complete list of funds.
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