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5 Top-Ranked Short-Term Government Bond Mutual Funds To Buy

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, 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. Below, we will share with you 5 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. American Funds Short-Term Tax-Exempt Bond A (MUTF: ASTEX ) seeks tax exempted current income. ASTEX invests a large portion of its assets in securities that are exempt from regular federal income tax. ASTEX invests not more than 20% of its assets in securities that are subject to federal alternative minimum tax. ASTEX mostly invests in municipal bonds having a rating of AA- or better. ASTEX’s combined portfolio has a dollar-weighted average maturity of not more than three years. The American Funds Short-Term Tax-Exempt Bond A fund has a three-year annualized return of 0.7%. ASTEX has an expense ratio of 0.58% compared to a category average of 0.71%. AMG Managers Short Duration Government Fund (MUTF: MGSDX ) invests the majority of its assets in debt securities issued by the U.S. government or derivatives that have economic traits similar to such securities. MGSDX aims to reduce credit risk by investing in securities of the highest credit quality. The AMG Managers Short Duration Government fund has a three-year annualized return of 0.2%. As of December 2015, MGSDX held 424 issues, with 4.96% of its total assets invested in Fed Natl Mort Assc 3%. Lord Abbett Short Duration Income Fund A (MUTF: LALDX ) seeks appreciably high level of income and preservation of capital. LALDX invests a minimum of 65% of its assets in investment grade debt securities. These may include corporate debt securities of U.S. issuers and non-U.S. issuers denominated in U.S. dollars, mortgage-backed securities, U.S. government securities and inflation-related investments. The Lord Abbett Short Duration Income A fund has a three-year annualized return of 1.1%. LALDX has an expense ratio of 0.59% as compared to a category average of 0.80%. PNC Ultra Short Bond I (MUTF: PNCIX ) invests in investment-grade securities including U.S. government securities, corporate bonds, asset-backed securities and mortgage-backed securities. PNCIX has a dollar-weighted average maturity of not more than 18 months, but may vary outside that range from time to time. The PNC Ultra Short Bond I fund has a three-year annualized return of 0.2%. As of December 2015, PNCIX held 87 issues, with 5.98% of its total assets invested in US Treasury Note 0.75% SEI Daily Income Trust Short-Duration Government Fund (MUTF: TCSGX ) seeks current income. TCSGX generally invests all of its assets in obligations of the US Treasury and obligations that are approved by the US government or by its agencies. These securities include mortgage-backed securities, and repurchase agreements. TCSGX may consider securities of agencies including the Federal National Mortgage Association (Fannie Mae ( OTCQB:FNMA )) and the Federal Home Loan Mortgage Corporation that are affiliated by the US government. The SEI Daily Income Trust Short-Duration Government A fund has a three-year annualized return of 0.4%. TCSGX has an expense ratio of 0.48% as compared to a category average of 0.80%. Original Post

Market Beating Performance Helped This Market Neutral Fund Grow Assets

Low correlation to traditional asset classes has always been one of the appealing features of alternative investments, but with the S&P 500 Index posting double-digit successive gains of 15.9%, 32.2%, and 13.6% from 2012 through 2014, low correlation hurt more alternatives than it helped. Even in 2015, a year marked by out-sized volatility, the S&P managed to eke out a modest gain of 1.36%, while most alternative categories posted losses in the aggregate. But not the LMCG Global Market Neutral Fund (MUTF: GMNIX ). Its annual gains of 4.82% in 2015 smashed the S&P 500’s returns and beat Morningstar’s Market Neutral category average by 507 basis points, and those returns followed a solid 9.99% return in 2014. Top Performance in 2015 This solid performance no doubt helped the fund attract interest from investors, pushing its assets under management (“AUM”) above $100 million by early 2016. While the fund’s 2015 performance fell a bit short of Morningstar’s Fund Manager of the Year award winner in the alternatives category, the Vanguard Market Neutral Fund (MUTF: VMNIX ), it did beat out 87% of its competitors in the market neutral category. In fact, the LMCG fund spent much less time underperforming over the course of 2015 than did the Vanguard fund. Click to enlarge “The fund has gained early traction with sophisticated advisors, who are familiar with alternative mutual funds and feel comfortable using it for a variety of goals,” said LMCG CEO Kenneth Swan, in a recent statement celebrating the milestone. “Traditional ‘low-volatility’ options such as bond funds or allocating to cash may not deliver the overall return profile these advisors are seeking. We designed this fund to offer investors a different option: to potentially generate positive returns regardless of the market’s direction.” The fund’s stock-selection process uses quantitative methodology that’s been “time-tested over 15 years and stress-tested in extreme market selloffs.” The strategy seeks capital preservation and is designed to generate positive returns in any market environment. Macro bets are avoided, and the fund does not use leverage. Volatility Likely to Continue “Equity markets could continue to be volatile in 2016,” said Gordon A. Johnson, Lead Portfolio Manager of the fund. “Our fund is designed to generate alpha on the long and short side – both domestically and internationally – and strives to provide a smoother ride for the investor whether the volatility that we are seeing continues or subsides.” The LMCG Global Market Neutral Fund is available in institutional ( GMNIX ) and investor (MUTF: GMNRX ) share classes, with respective net-expense ratios of 1.60% and 1.85%, excluding certain expenses as outlined in the prospectus. The minimum investment for GMNIX is $100,000, while the minimum for GMNRX is $2,500. Past performance does not necessarily predict future results. Jason Seagraves contributed to this article.

There’s The Time Value Of Money – And There’s The Value Of Your Time

An underappreciated benefit of low-cost, index-based investing is the modest time involved. That is, in comparison to the time commitment associated with individual stock-picking or some other variant of active investment management. The low-cost, index-based approach gives an investor more time to enjoy other pursuits. Such as time with family and friends, a good book, music, charitable and civic activities, hobbies (what’s a hobby?)… and on occasion a nice glass of wine. Active investment management in contrast goes hand-in-hand with consistent if not constant dedication to general economic news, industry-specific business news, and company-specific news. Attention to all the topics, risks, and developments described in detail in Securities and Exchange Commission filings or other disclosure documents that few investors read in time-consuming detail. Attention that’s paid by oneself or by compensating another to pay that attention. (It’s commonly forgotten that the word “pay” in the phrase “pay attention” is literal. One pays with one’s time, a precious, perishable, and irretrievable item. A costly item.) “Found time” via indexing has value of course. Value that may be hard to quantify, but quantification matters little. Please remember this: the average human life span is less than one million hours. Concern yourself not with Chinese export trends and currency manipulation, Midwest factory capacity utilization, Janet Yellen’s disposition, Vladmir Putin’s territorial ambitions of the month, Apple’s iPhone sales during the most recently concluded quarter, the price of oil, or the like. Or whether that company of which you hold many shares of stock will successfully bid that contract, win that lawsuit, or get that drug approved. Instead, relax. Yes, index-based investing consumes time – just not much. For example, a little time is involved in prudent rebalancing. That’s time well spent. As is time taking advantage of opportunities to reduce one’s investment costs, as cost pressures on investment managers of all stripes continue to lower costs. And with “robo-advisors” and their increasingly sophisticated auto-pilot portfolios sprouting like weeds these days, the time commitment to be a responsible low-cost, index-based investor decreases even more. Unless an investor consumes the greater part of daily economic news for enjoyment or as a hobby – and seems that’s a tall order with today’s information proliferation – what’s not to like about time saved? Especially when coupled with low-cost, index-based investing that can be expected, as empirical studies time and again show, to yield higher risk-adjusted net returns.