5 Diversified Bond Mutual Funds For Stable Return

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. Also, 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 5 potential diversified bond mutual funds. Each has earned either a Zacks #1 Rank (Strong Buy) or aZacks Rank #2 (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 mutual funds, investors can click here to see the complete list of funds.

Voya Intermediate Bond A (IIBAX –MF report) seeks to provide maximum total return. IIBAX invests a major portion of its assets in investment-grade bonds including corporate, government and mortgage bonds. IIBAX is expected to have a dollar-weighted average duration of 3-10 years. The Voya Intermediate Bond A fund returned 3.1% in the last one year period.

IIBAX has an expense ratio of 0.70% compared to a category average of 0.85%.

Fidelity Total Bond (FTBFX - MF report) invests a lion’s share of its assets in debt instruments and repurchase agreements. FTBFX follows the Barclays U.S. Universal Bond Index in order to invest in the investment-grade, high yield, and emerging market securities. FTBFX may invest a maximum of one-fifth of its assets in debt securities that are rated below investment-grade. The Fidelity Total Bond fund returned 2.9% in the last one year period.

As of March 2015, FTBFX held 1,489 issues, with 4.85% of its total assets invested in US Treasury Note 1.25%.

MFS Total Return Bond A (MRBFX - MF report) seeks total return through current income. MRBFX invests a large chunk of its assets in debt securities, which include corporate bonds, U.S. government securities, asset-backed securities and foreign government securities. MRBFX primarily focuses on acquiring investment grade securities but may also allocate a smaller portion of its assets in lower quality debt instruments. The MFS Total Return Bond A fund returned 2.5% in the last one year period.