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3 Top-Rated Government Intermediate Bond Mutual Funds To Consider

Mutual funds investing in 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. U.S. government bond funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered to be the safest in the bond fund category and are ideal options for the risk-averse investor. Meanwhile, intermediate-term funds usually provide a safer option for investors, when compared to small-term funds. Fixed income securities having an average maturity period between 3 and 10 years are classified as intermediate securities. These funds are believed to ensure more stability and provide a higher return than what short-term funds offer. Below, we will share with you 3 top-rated government intermediate bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all government intermediate bond funds, investors can click here to see the complete list of funds . Hartford US Government Securities HLS IB (MUTF: HBUSX ) invests a major portion of its assets in securities that are affiliated to the U.S. government or its entities. HBUSX invests in U.S. treasury instruments and other securities of the U.S. government. HBUSX may also invest in mortgage-backed securities of the U.S. government. The Hartford US Government Secs HLS IB fund has a three-year annualized return of 1.2%. Michael F. Garrett is the fund manager since 2012. AMG Managers Intermediate Duration Government (MUTF: MGIDX ) seeks total return more than that of market indices related to mortgage-backed securities. MGIDX primarily invests in debt securities of the U.S. government or other agencies authorized by the government. MGIDX invests in securities having an impressive credit quality to reduce risk. The AMG Managers Intermediate Duration Government fund has a three-year annualized return of 2.6%. As of June 2015, MGIDX held 369 issues with 11.99% of its assets invested in Freddie Mac Gold Single Family TBA 4% 2046-03-01. Performance Trust Strategic Bond (MUTF: PTIAX ) invests a large portion of its assets in fixed-income instruments which include corporate, government and municipal bonds, asset-backed and mortgage-backed securities and other fixed-income instruments issued by various U.S. governments, municipal or private-sector entities. PTIAX seeks interest income and potential capital appreciation. The Performance Trust Strategic Bond fund has a three-year annualized return of 3.8%. PTIAX has an expense ratio of 0.84% as compared to the category average of 1.01%. To view the Zacks Rank and past performance of all government intermediate bond mutual funds, investors can click here to see the complete list of funds . 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. Original Post

Adding Risk Parity To A Portfolio

We’re always trying to build a better mousetrap around here by adding non-correlated asset classes to our portfolio. While there is no “free lunch” in economics, true diversification is about as close as you’re ever going to get. And by “true diversification,” I mean adding assets to the portfolio that really do zig when the others zag. A portfolio of 100 stocks doesn’t offer much diversification benefit when the entire market rolls over. At any rate, Dr. Phillip Guerra and I have cooked up a suite of alternative portfolios based on the principles of risk parity. We’ve been running our Active Risk Parity Portfolio With 7% Annual Volatility Target live since September, and we’ve backtested it to 1996. The results aren’t too shabby, if I do say so myself. Average annual returns of 11.5% with a maximum drawdown of just 9.8% and a correlation to the stock market of just 0.24. Rather than target returns – which are impossible to know with any accuracy in advance – we target volatility. While volatility will also fluctuate over time, we find it to be more accurate to target, and also that it gives us a better handle on risk. The key to making money over time is first to avoid losing it. I don’t consider this a replacement for a traditional long stock portfolio. In fact, most of the money I manage is long-only and dividend-focused. But I certainly do consider this a nice addition to a traditional stock portfolio. With bonds not likely to offer much in the way of return anytime soon, you need viable alternatives for the “40” in the old 60/40 portfolio of stocks and bonds. A risk parity model can certainly fill that role. This article first appeared on Sizemore Insights as Adding Risk Parity to a Portfolio . Disclaimer: This article is for informational purposes only and should not be considered specific investment advice or as a solicitation to buy or sell any securities. Sizemore Capital personnel and clients will often have an interest in the securities mentioned. There is risk in any investment in traded securities, and all Sizemore Capital investment strategies have the possibility of loss. Past performance is no guarantee of future results. Original Post

Video: The World Is Going Passive. Is It A Mistake?

Man Group’s 2016 Unconventional Views video series is designed to present original thoughts and insights that challenge the consensus view. The videos feature leading executives from the firm’s four investment engines, Man AHL, Man GLG, Man FRM and Man Numeric, explaining their views on various investment themes. In recent years, there has been a seismic shift within the asset management industry from active to passive investing. In this video, Ben Funnell, Portfolio Manager at Man GLG, considers this shift and explains why he thinks the growing alpha opportunity in the market is tipping the balance back in favor of active management. He outlines several structural and cyclical reasons to support his argument that today’s investors should take a second look at active management: Fund alpha is more important later in a market cycle, and this alpha is vital for many institutional investors with real growth hurdles and obligations to distribute. The stock-picker’s opportunity set is increasing along with the percentage of stock-specific return, which may represent a structural change. Smart beta may not be so smart, especially since allocating away from active managers still requires active decision-making. Past performance is not indicative of future results. The value of an investment and any income derived from it can go down as well as up and investors may not get back their original amount invested. Opinions expressed are those of the author, may not be shared by all personnel of Man Group plc (‘Man’) and are subject to change without notice.