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 portfolios with 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. Meanwhile, a short-term government bond fund is a mutual fund that’s limited, by its investment objectives and fund bylaws, to investing primarily in short-term obligations of the federal government or its agencies. Depending on the fund’s definition, short-term can be up to five years.
Below we will share with you 3 potential short-term government bond mutual funds. 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 short-term government bond funds, investors can click here to see the complete list of funds.
SEI Daily Income Trust Short-Duration Government AÂ (TCSGXÂ -Â MF report) seeks to provide current income by preserving principal value and maintaining high liquidity. TCSGX is expected to invest 100% of its assets securities of the U.S. Treasury and other securities that are issued by the U.S. government or its affiliates. These securities include mortgage-backed securities, and repurchase agreements. TCSGX may also invest a significant portion of its assets in securities of the U.S. government affiliates including the Federal National Mortgage Association (FNMA or Fannie Mae) and the Federal Home Loan Mortgage Corporation. The SEI Daily Income Trust Short-Duration Government A fund has a five-year annualized return of 1%.
