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 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.
Wasatch-Hoisington US Treasury (WHOSX) invests at least 90% of its assets in U.S Treasury securities and repurchase agreements backed by such instruments. The fund also purchases long term U.S. Treasury Bonds. 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%.
Federated US Government Bond (FEDBX) seeks total return. The fund focuses on acquiring U.S. government securities as well as treasury securities and related derivatives. It also invests in mortgage-backed securities issued or backed by the U.S. government. The government bond mutual fund returned 18.14% over the last one year period.
As of December 2011, this government bond mutual fund held 19 issues, with 12.47% of its total assets invested in United States Treasury Note, 2.000%, 11/15/2021.
Fidelity Spartan Long-Term Treasury Bond Index (FLBIX) invests at least 80% of its assets in securities which are part of the Barclays Capital U.S. Long Treasury Bond index. The dollar-weighted average maturity period of the portfolio is at least 10 years or more. The government bond mutual fund returned 27.98% over the last one year period.
The Fund Manager is Curt Hollingsworth and he has managed this government bond fund since 2009.
Dreyfus US Treasury Long-Term (DRGBX) seeks current income and capital growth. The fund invests a substantially high proportion of its assets in securities issued or guaranteed by the U.S. government or its agencies. The government bond mutual fund returned 27.86% over the last one year period.
The government bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.65% compared to a category average of 0.84%.
Vanguard Long-Term Treasury Investor (VUSTX) utilizes a large share of its assets to purchase securities issued by the U.S. Treasury, including bills, bond and notes. The fund aims at maintaining a weighted average maturity period of 15 to 30 years. The government bond mutual fund returned 28.16% 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 at http://www.zacks.com/funds.
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