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A short-term government bond fund is a mutual fund that’s limited, by its investment objectives and fund bylaws, to investing primarily in short-term obligations of the federal government or its agencies. Depending on the fund’s definition, short term can be up to five years. Meanwhile, mutual funds investing in government debt securities are among the most secure investment options which provide regular income while protecting the capital invested. Funds which are part of this category bring a great deal of stability to portfolios with a large proportion of equity, while providing dividends more frequently than individual bonds. Hence, they are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor. Below we will share with you 4 top-rated short-term government bond mutual funds. Each has earned a Zacks Mutual Fund #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. Fidelity Spartan Short Term Trust Bond Index Fund (MUTF: FSBIX ) invests a major portion of its assets in securities included in the Barclays U.S. 1-5 Year Treasury Bond Index. FSBIX uses statistical tools such as duration, maturity, interest rate sensitivity, security structure, and credit quality to imitate the returns of the index. The Fidelity Spartan Short Term Trust Bond Index Fund returned 1.1% in the last one year. FSBIX has an expense ratio of 0.20% as compared to a category average of 0.80%. Vanguard Short Term Treasury Fund (MUTF: VFISX ) seeks current income with minimum price volatility. VFISX invests a large share of its assets in U.S. Treasury instruments such as bills, bonds, and notes. VFISX seeks to maintain a dollar-weighted average maturity between 1 and 4 years. The Vanguard Short Term Treasury Fund returned 0.9% in the last one year. Gemma Wright-Casparius is the fund manager and has managed VFISX since January 2015. JPMorgan Short Duration Bond Fund A (MUTF: OGLVX ) invests a large portion of its assets in investment grade debt securities having short-to-intermediate maturities. These include U.S. government obligations, and mortgage-backed and asset-backed securities. OGLVX selects individual securities on the basis of a risk/reward analysis, including an evaluation of interest rate risk, credit risk, and the legal and technical structure of the transaction. OGLVX offers dividends monthly and capital gains annually. The JPMorgan Short Duration Bond Fund A returned 0.4% in the last one year. As of August 2015, OGLVX held 1636 issues, with 2.85% of its total assets invested in US Treasury Note 0.625% Oppenheimer Limited-Term Government Fund A (MUTF: OPGVX ) seeks current income. OPGVX invests the majority of its assets in debt securities issued by the U.S. government. OPGVX may also invest a maximum 20% of its assets in mortgage-backed securities, which are not issued by the U.S. government. OPGVX aims to maintain an average effective portfolio duration of a maximum of three years. The Oppenheimer Limited-Term Government Fund A returned 0.8% in the last one year. Peter A. Strzalkowski is the fund manager and has managed OPGVX since April 2009. Original Post Scalper1 News
Scalper1 News