3 Potential Diversified Bond Mutual Funds To Consider

Fixed-income securities are the preferred choice of investors who are ready to forgo capital growth for regular income flows. The expense involved in creating such a portfolio of bonds from different categories may be quite considerable. This is why most investors select mutual funds since they are a convenient and affordable method of investing in bonds. Diversified bond funds further reduce the risk involved by holding securities from different sectors. A downturn in any one sector therefore only has a partial effect on the fund’s fortunes.

Below we will share with you 3 diversified bond mutual funds to consider. Each has earned either a Zacks #1 Rank (Strong Buy) or a Zacks #2 Rank (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.

Delaware Diversified Income A (DPDFX - MF report) seeks high total return over the long run. The fund invests a lion’s share of its assets in fixed income instruments. It allocates its assets in diversified sectors including the U.S. investment grade sector, the U.S. high-yield sector, the international developed markets sector and the emerging markets sector. A maximum of 25% of its assets gets invested in securities from emerging markets. The diversified bond mutual fund has a five-year annualized return of 5%.

As of December 2014, this diversified bond mutual fund held 1536 issues, with 3.55% of its total assets invested in 10 Year US Treasury Note Future Mar15.

Virtus Multi-Sector Intermediate Bond A (NAMFX - MF report) invests a majority of its assets in debt securities of undervalued sectors using immense credit research. It diversifies its investment among 14 sectors in order to derive higher return with reduced risk. The fund seeks maximum total return and current income. The diversified bond mutual fund has a five-year annualized return of 6.5%.

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