Investing in diversified bond funds is more preferred to individual bond investing, as building a portfolio of the second type may prove relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive.
Moreover, mutual funds having significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.
Below, we share with you three top-ranked diversified bond mutual funds, namely DWS Short Duration (DBPIX – Free Report) , BBH Limited Duration (BBBMX – Free Report) and Ave Maria Bond (AVEFX – Free Report) . Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
DWS Short Duration invests in fixed-income securities rated within the top four credit rating categories by nationally recognized credit rating agencies. DBPIX advisors invest in securities with varying maturities. The fund has returned 1.5% over the past three years.
Bryan Dziuban has been one of the fund managers of DBPIX since January 2024.
BBH Limited Duration aims for maximum total return. BBBMX invests in a well-diversified portfolio of durable, performing fixed-income instruments focused on asset-backed securities, notes and bonds. The fund has returned 3.5% over the past three years.
As of April 2024, BBBMX had 58.6% of its assets invested in Total Misc Bonds.
Ave Maria Bond invests in investment-grade debt securities of domestic issuers, including the U.S. government and its agencies and instrumentalities, corporations and municipalities and money market instruments. AVEFX may invest part of its net assets in preferred stocks, common stocks paying dividends and securities convertible into common stock. The fund has returned 2.2% over the past three years.
AVEFX has an expense ratio of 0.41%.
To view the Zacks Rank and the past performance of all diversified bond mutual funds, investors can click here to see the complete list of diversified bond mutual funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>