Investing in diversified bond funds is more 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 Ave Maria Bond Fund Class R (AVEFX - Free Report) , Pacific Funds Strategic Income - Advisor Class (PLSFX - Free Report) and PGIM Absolute Return Bond Fund Class A (PADAX - Free Report) .
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.Ave Maria Bond Fund Class R invests most of its assets, along with borrowings, if any, in investment-grade debt securities issued by the U.S. government and its agencies like corporations, municipalities and money market instruments.
AVEFX advisors also invest a small portion in equity securities of domestic or foreign issuers, irrespective of their market capitalization.Ave Maria Bond Fund Class R has three-year annualized returns of 2.80%. As of the end of Jun 2022, AVEFX has 18.75% of its assets invested in equities.Pacific Funds Strategic Income - Advisor Class invests most of its net assets in a portfolio of debt securities based on the advisors' view of the market. PLSFX advisors invest in non-investment grade debt instruments like floating rate loans as well as investment grade debt instruments like corporate debt securities, asset-backed securities, mortgage-related securities issued by U.S.
government securities and agency securities in various proportions.Pacific Funds Strategic Income - Advisor Class has three-year annualized returns of 1.3%. PLSFX has an expense ratio of 0.69% compared with the category average of 0.97%.PGIM Absolute Return Bond Fund Class A seeks positive return regardless of the market conditions by investing most of its assets along with borrowings, if any, in debt securities and investments that provide exposure to bonds. PADAX advisors may also invest in debt securities rated below investment or junk bonds.PGIM Absolute Return Bond Fund Class Afundhas three-year annualized returns of 0.4%.
Michael J. Collins has been one of the fund managers of PADAX since March 2011.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.Want key mutual fund info delivered straight to your inbox?Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>