Top 5 Highest Yielding Government Bond Mutual Funds (Oct. 2011)

Conservative investors prefer debt instruments not only because they safeguard the capital invested but also for the regular income flows they provide. Bonds bring a great deal of stability to an equity-heavy portfolio 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 the 5 highest yielding Zacks #1 ranked 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.

Mutual Fund SEC Yield
JP Morgan Real Return 4.49%
Vanguard Long Term Treasury Investor 4.09%
Fidelity Spartan Long Term Treasury Bond Index 4.05%
T. Rowe Price US Treasury Long Term 3.77%
Dreyfus US Tresury Long Term 3.15%

JPMorgan Real Return (RRNSX) seeks maximum return and protection from inflation. A large share of the funds assets is utilized to acquire Treasury Inflation Protected Securities (TIPS). It may also invest in derivatives and other inflation-linked debt instruments. The government bond mutual fund returned 10.5% over the last one year period.

The Fund Manager is Steven S. Lear and he has managed this government bond mutual fund since 2009.

Vanguard Long-Term Treasury Investor (VUSTX) utilizes at least 80% of its assets to purchase securities issued by the U.S. Treasury, including bills, bond and notes. The average maturity period of the portfolio varies between 15 to 30 years. The government bond mutual fund has a ten year annualized return of 7.21%.

The government bond mutual fund has a minimum initial investment of $3,000 and an expense ratio of 0.22% compared to a category average of 0.84%.

Fidelity Spartan Long-Term Treasury Bond Index (FLBIX) seeks high current income. The fund invests at least 80% of its assets in securities which are part of the Barclays Capital U.S. Long Treasury Bond index. The government bond mutual fund returned 4.4% over the last one year period.

The Fund Manager is Curt Hollingsworth and he has managed this government bond fund since 2009.

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 7.56%.

As of June 2011, this government bond mutual fund held 86 issues, with 9.17% of its total assets invested in US Treasury Bond 4.375%.

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 4.2% 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%.

To view the Zacks Rank and past performance of all government bond mutual funds, then click here.

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.

About Zacks Investment Research 1767 Articles

Zacks Investment Research is one of the most highly regarded firms in the investment industry. In 1978 Zacks originated the concept of utilizing earnings estimates revisions to make profitable investment decisions. Zacks offers multiple investment products and services to help investors achieve superior returns.

Visit: Zacks.com

Be the first to comment

Leave a Reply

Your email address will not be published.


*