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3 Best-Rated Diversified Bond Mutual Funds to Keep an Eye On

Diversified bond mutual funds provide excellent opportunities to investors looking for steady returns with a relatively low level of risk. These funds provide exposure to a wide range of market sectors, thus reducing sector-specific risks. A relatively higher level of liquidity also makes diversified bond funds more attractive. Meanwhile, investing in diversified bond funds is preferred to individual bonds’ investing as building a portfolio of the second type may prove more expensive than the former.

Below we share with you three best-ranked diversified bond mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its 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 .

PIMCO Income A (PONAX) seeks maximum current income. PONAX invests a minimum of 65% of its assets in fixed income securities from a wide range of sectors. These securities may include options, futures contracts and swap agreements. PONAX may invest not more than half of its assets in securities that are rated below investment grade. The PIMCO Income A fund has a three-year annualized return of almost 4%.

As of December 2015, PONAX held 4022 issues, with 7.76% of its total assets invested in Irs Usd 2.75000 06/17/15-10y Cme

Nuveen Preferred Securities A (NPSAX) invests a major portion of its assets in preferred securities. The advisor invests a minimum 25% of its assets in the preferred securities of companies primarily involved in financial services. NPSAX invests a minimum of half of its assets in securities rated investment grade. The Nuveen Preferred Securities A is a non-diversified fund and has a three-year annualized return of 4.3%.

NPSAX has an expense ratio of 1.06% as compared to the category average of 1.37%.

PIMCO Fixed Income SHares C (FXICX) seeks to maximize total return with preservation of capital. FXICX invests the majority of its assets in fixed-income securities including corporate debt obligations, inflation-indexed securities of corporate bodies and structured notes. FXICX allocates its assets throughout the globe. The PIMCO Fixed Income SHares C fund has a three-year annualized return of 0.9%.

Curtis A. Mewbourne is the fund manager of FXICX since 2009.

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 .

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Pick the best mutual funds with the Zacks Rank.


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