5 Top Diversified Bond Mutual Funds To Strengthen Your Portfolio

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 them secure and attractive investments.

Below we will share with you 5 top 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.

RidgeWorth Total Return Bond A (CBPSX - MF report) invests a lion’s share of its assets in debt securities of both domestic and foreign issuers, including emerging market debt. Not more than 20% of its assets are utilized to purchase high-yield debt securities rated below investment grade. It invests in income-generating debt securities such as mortgage backed securities, government and corporate obligations, and floating rate loans. It seeks total return higher than returns from domestic investment grade bond market. The diversified bond mutual fund returned 5.6% in the last one year period.

The diversified bond mutual fund has an expense ratio of 0.7% compared to a category average of 0.86%.

PIMCO Investment Grade Corporate Bond A (PBDAX - MF report) seeks total return along with capital preservation. The fund invests a large portion of its assets in investment grade debt securities of varying maturities that may be represented by derivative instruments. It may invest a maximum 15% of its total assets in junk bonds, rated B or higher by Moody's. The diversified bond mutual fund returned 8.6% in the last one year period.

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