Zacks #1 Ranked Government Bond Mutual Funds

Mutual funds investing in debt securities are among the most secure investment options which provide regular income while protecting capital invested. Funds which are part of this category bring a great deal of stability to portfolio which a large proportion of equity, 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.

Sentinel Total Return Bond A (SATRX) invests in securities and other derivatives irrespective of their maturity period. It primarily focuses on maximizing its return from income and capital growth. It invests in investment-grade bonds and may invest a maximum of 50% of its assets in junk bonds. The government bond mutual fund returned 4.15% over the last one year period.

The fund has an expense ratio of 0.89% as compared to category average of 0.89%.

Waddell & Reed Government Securities A (UNGVX) seeks substantial current income with capital preservation. It invests in diversified domestic government securities. It may invest in mortgage securities of other agencies which are approved and sponsored by the U.S. government. The government bond mutual fund returned -3.46% over the last one year period.

Mark J. Otterstrom is the fund manager and has managed this fund since 2008.

JHancock Investment Grade Bond A (TAUSX) invests a lion’s share in investment grade bonds irrespective of their date of maturity. It may also invest in other securities including futures and options, among others, for gaining market exposure and high return. The government bond mutual fund returned 0.03% over the last one year period.

As of January 2014, this fund held 403 issues with 3.97% of its assets invested in U.S. Treasury Note.

Putnam American Government Income A (PAGVX) seeks substantial current income. A large share of the fund’s assets is utilized to purchase bonds as well as asset backed debt securities that are issued by the U.S. government and also by its agencies. The fund may also invest in derivatives. The government bond mutual has a five year annualized return of 6.40%.

The fund has an expense ratio of 0.87% as compared to category average of 0.95%.

Delaware Core Plus Bond A (DEGGX) invests a lion’s share of its assets in fixed-income securities. At least half of its assets are invested in domestic low risk debt securities including corporate bonds and mortgage and asset related securities, among others. The government bond mutual fund returned 0.34% over the last one year period.

John P. McCarthy is the fund manager and has managed this fund since 2012.

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.

Read the analyst report on SATRX

Read the analyst report on UNGVX

Read the analyst report on TAUSX

Read the analyst report on PAGVX

Read the analyst report on DEGGX


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