Diversified bond funds provide investors with a convenient and affordable option to hold a portfolio of bonds from different economic sectors. The costs incurred to create a portfolio of individual bonds would be significantly higher than investing in this class of funds. The associated risk also undergoes a decline since volatility in a specific sector has only a partial effect on the fund’s fortunes. The opportunity to reinvest the income generated and a relatively higher level of liquidity also make these funds a secure and attractive investment.
Below we will share with you 3 best rated diversified 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 diversified bond funds, investors can click here to see the complete list of funds.
Fidelity Series Investment Grade Bond (FSIGX - MF report) seeks high current income over the long run. FSIGX invests a lion’s share of its assets in medium and high quality investment-grade debt securities. FSIGX is expected to maintain interest rate risk identical to the Barclays U.S. Aggregate Bond Index. FSIGX invests across a wide range of sectors with different maturity durations throughout the globe. FSIGX may also allocate a significant portion of its assets in lower-quality debt securities. The Fidelity Series Investment Grade Bond mutual fund has a five-year annualized return of 4.7%.
FSIGX has an expense ratio of 0.45% compared to a category average of 0.86%.
JPMorgan Core Bond AÂ (PGBOXÂ -Â MF report) generally invests in debt instruments having intermediate and long term maturity periods. PGBOX seeks to provide maximum total return by investing in debt securities including corporate bonds, U.S. treasury obligations and mortgage-backed securities. PGBOX is expected to have average weighted maturity of 4 to 12 years. The JPMorgan Core Bond A mutual fund has a five-year annualized return of 4.3%.
