Investing in diversified bond funds is preferred to individual bond investing, as building a portfolio of the second type may prove relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive.
Moreover, mutual funds having significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.
Below, we share with you three top-ranked diversified bond mutual funds, namely BBH Limited Duration Fund BBBMX, DWS Short Duration DBPIX and Ancora Income AAIIX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
BBH Limited Duration Fund invests most of its net assets in a diversified portfolio of fixed-income securities, which includes floating or variable-rate debt instruments. BBBMX advisors generally invest in issues that are performing well and available at an attractive valuation.
BBH Limited Duration Fund has three-year annualized returns of 4.6%. As of the end of October 2024, BBBMX had 55.1% of its assets invested in miscellaneous bonds.
DWS Short Duration fund invests mostly in fixed-income securities rated within the top four credit rating categories by nationally recognized credit rating agencies. DBPIX advisors invest in securities with varying maturities.
DWS Short Duration fund has three-year annualized returns of 2.9%.DBPIX has an expense ratio of 0.50%.
Ancora Income fund invests mostly in debt securities, preferred stocks, high dividend-bearing common shares, as well as common and preferred shares of closed-end investment companies with market capitalization of more than $500 million. AAIIX also invests in closed-end funds and convertible securities of large, small and mid-sized companies.
Ancora Income fund has three-year annualized returns of 2.4%. Kevin Gale has been the fund manager of AAIIX since the end of May 2020.
To view the Zacks Rank and the past performance of all diversified bond mutual funds, investors can click here to see the complete list of diversified bond mutual funds.
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