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.
Moreover, investing in diversified bond funds is 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.
Below, we share with you three top-ranked diversified bond mutual funds, viz., Pacific Funds Strategic Income PLSFX, Ancora Income Fund AAIIX, and BBH Limited Duration Fund BBBMX. Each has earned 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.
Pacific Funds Strategic Income invests in debt products that generate income, specifically focusing on investment-grade debt instruments such as corporate debt securities, asset-backed securities, mortgage-related securities, U.S. government securities and agency securities. PLSFX advisors allocate a portion of its assets to non-investment grade debt instruments and floating rate loans.
Pacific Funds Strategic Income has three-year annualized returns of 6%. As of December 2022, PLSFX had 1% of its assets invested in APPLIED SYS.
Ancora Income Fund seeks to achieve its objective by investing in income-producing assets, such as debt securities, preferred stocks, high dividend-bearing common shares, and common and preferred shares of closed-end investment organizations. AAIIX advisors also invest in closed-end funds as well as convertible securities.
Ancora Income Fund has three-year annualized returns of 4.8%. AAIIX has an expense ratio of 0.93% compared with the category average of 1%.
BBH Limited Duration Fund seeks to achieve its investment goal by assembling a diverse portfolio of fixed-income securities, which includes debt products with floating or variable rates. The advisor’s strategy is to only make investments in debt instruments that have stable performance, are priced fairly in the market, and display consistent performance.
BBH Limited Duration Fund has three-year annualized returns of 2.6%. Andrew Hofer has been one of the fund managers of BBBMX since February 2011.
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.
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