Mutual funds investing in debt securities are among the most secure investment options which provide regular income while protecting capital invested. Funds from this category bring a great deal of stability to portfolio with a large proportion of equity, while providing dividends more frequently than individual bonds. U.S government bond mutual 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.
Oppenheimer US Government A (OUSGX) seeks high current income. The fund primarily invests in debt securities issued by the U.S. government. Securities issued or guaranteed by the U.S. treasury are among its major investments. The government bond mutual fund returned 9.81% over the last one year period.
The Fund Manager is Peter A. Strzalkowski and he has managed this government bond mutual fund since 2009.
Fidelity Spartan Long-Term Treasury Bond Index (PRTIX) 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 has a three year annualized return of 10.48%.
As of August 2010, this government bond mutual fund held 35 issues, with 7.31% of its total assets invested in United States Treas Bds 4.625%.
Wasatch-Hoisington US Treasury (WHOSX) seeks both capital growth and current income. The fund invests at least 90% of its assets in U.S Treasury securities and repurchase agreements backed by such instruments. The government bond mutual fund returned 12.68% 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 0.92%.
T. Rowe Price US Treasury Long-Term (PRULX) invests at least 85% of its assets in U.S Treasury securities. The balances of its funds are used to purchase other securities issued by the U.S. government. The average weighted maturity generally ranges from 15 and 20 years, but may range from 10 to 30 years. The government bond mutual fund has a five year annualized return of 6.44%.
Brian J. Brennan is the fund manager and has managed this government bond mutual fund since 2003.
Vanguard Long-Term Treasury Investor (VUSTX) seeks current income which is appreciable and sustainable. At least 80% of its assets are used to purchase securities issued by the U.S. Treasury, including bills, bond and notes. The government bond mutual fund has a ten year annualized return of 7.89%.
The government bond mutual fund has a minimum initial investment of $3,000 and an expense ratio of 0.25% compared to a category average of 0.92%.
To view the Zacks Rank and past performance of all government bond mutual funds, then click here.