4 Best-Rated Diversified Bond Mutual Funds To Invest In

Diversified bond funds provide investors with a convenient and affordable option to hold a portfolio of bonds from different economic sectors. Costs incurred to create a portfolio of individual bonds would be significantly higher than investing in this class of funds. The associated risk also declines 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 them a secure and attractive investment.

Below we share with you 4 top-ranked diversified bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the 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 diversified bond funds.

MassMutual Premier Short-Duration Bond R5 (MSTDX – MF report) seeks high level of total return. MSTDX maintains a diversified portfolio by investing predominantly in fixed income securities. MSTDX invests a major portion of its assets in investment grade securities. MSTDX is expected to maintain a dollar-weighted average maturity of three years or less. MSTDX may invest not more than 10% of its assets in securities below investment grade. The MassMutual Premier Short-Duration Bond R5 fund has returned almost 1% over the past one year.

MSTDX has an expense ratio of 0.52% compared to a category average of 0.81%.

DoubleLine Core Fixed Income N (DLFNX – MF report) invests the majority of its assets in securities that are expected to provide fixed income. Around one-third of DLFNX’s assets get invested in securities including junk bonds, bank loans and credit default swaps. The DoubleLine Core Fixed Income N fund has returned 1.4% over the past one year.

Jeffrey E. Gundlach is one of the fund managers and has managed DLFNX since 2010.

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. The Voya Intermediate Bond A fund returned 1.1% over the past one year.

IIBAX has an expense ratio of 0.66% compared to a category average of 0.82%.

RidgeWorth Total Return Bond A (CBPSX – MF report) invests a majority of its assets in fixed-income derivatives including debt securities issued by the government and its affiliates, corporate bonds and asset-backed securities. CBPSX invests in debt securities throughout the globe including those from emerging economies. CBPSX may invest a maximum of 20% of its assets in high-yield securities that are rated below investment-grade. The RidgeWorth Total Return Bond A fund returned 0.9% in the last one-year period.

As of October 2015, CBPSX held 278 issues, with 10.11% of its total assets invested in US Treasury Note 2%.