25 Top Performer Taxable Bond Mutual Funds 2011

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Bond mutual fund or fixed income fund has enjoyed one of the longest bull markets for the past 30 years. While stock funds have stagnant for the past 10 year, bond funds have outperformed. With market volatility for the past 3months, bond funds have relatively stable and achieve better return. There are two types of bond funds: taxable bond funds and municipal bond funds. The following is the 25 top performing bond funds (3 month performance). I also include the short fund review.

Note: Bond funds include: Government bond, inflation protection bond fund (TIP), general bond, bank loan bond fund, world bond fund, multisector bond fund, emerging market bond fund, municipal bond fund, etc.

The 25 Top Performer bond mutual funds September 2011 for the past 3 month are:
Top Performer Bond Funds 2011
  1. PIMCO Extended Duration Instl (PEDIX)
  2. Vanguard Extended Duration Treasury Index Instl (VEDTX)
  3. ProFunds US Government Plus Inv (GVPIX)
  4. Rydex Govt Long Bond 1.2x Strategy Inv (RYGBX)
  5. Wasatch-Hoisington US Treasury (WHOSX)
  6. American Century Zero Coupon 2025 Inv (BTTRX)
  7. Fidelity Spartan L/T Term Bond Index Inv (FLBIX)
  8. Vanguard Long-Term Treasury Inv (VUSTX)
  9. Vanguard Long-Term Government Bond Index Instl (VLGIX)
  10. T. Rowe Price US Treasury Long-Term (PRULX)
  11. Direxion Mthly 10 Year Note Bull 2X (DXKLX)
  12. Dreyfus US Treasury Long-Term (DRGBX)
  13. PIMCO Long-Term US Government Institutional (PGOVX)
  14. Federated US Government Bond Institutional Svc (FEDBX)
  15. Vanguard Long-Term Bond Index Inv (VBLTX)
  16. BlackRock Long Duration Bond Inv A (BLADX)
  17. American Century Zero Coupon 2020 Inv (BTTTX)
  18. Morgan Stanley Institutional Long Duration Fixed Income I (MSFIX)
  19. Eaton Vance Build America Bonds A (EBABX)
  20. SunAmerica 2020 High Watermark A (HWKAX)
  21. PIMCO Real Return Asset Instl (PRAIX)
  22. Dupree Taxable Municipal Bond (DUTMX)
  23. PIMCO Long Duration Total Return Instl (PLRIX)
  24. Vanguard Long-Term Investment-Grade Inv (VWESX)
  25. Vanguard Long-Term Corp Bond Index Instl (VLCIX)
updated on 9/28/2011

MEPB Financial observations are:
  • Most of these taxable bond funds or taxable fixed income funds have outperformed the stock funds or equity funds
  • The Treasury bond funds or U.S. government bond funds have outperformed other category of bond funds. Due to economic slowdown in Europe and Asia, investors have flocking into US treasuries.
  • Most of these funds are available through online brokerage
  • Some funds also have no sales load (i.e. these funds are known as No Load Fund). 
  • Some of the low cost vanguard funds are part of the top performers 
  • The top 5 performer may not have the best long term performance. You can also find best rated fund by Morningstar with 4- and 5-stars rating in this top performing list.
1. PIMCO Extended Duration Institutional (PEDIX)

The PIMCO Extended Duration Institutional fund is seeking for maximum total return and the prudent investment management. This PIMCO bond fund is classified as Long Government bond fund. The total net assets of this PIMCO fund are $308.3 million. It has 3.20% dividend yield and the last dividend distributed in August 2011 is $0.03. Stephen Rodosky is the lead fund’s manager of this fund since 2007. The fund’s annual expense ratio is 0.50%. There is no sales load fee.

The effective maturity of this PIMCO fund is 28.87 years and the effective duration is 29.48 years. The other class of this fund is Class P (PEDPX). As of June 2011, the top 3 sectors diversification of this fund is Government Related, Mortgage and Investment Grade Credit.

2. Vanguard Extended Duration Treasuries Index Institutional (VEDTX)

This Vanguard Extended Duration Treasuries Index Institutional fund pursues to track the performance of an index of extended-duration zero coupon US Treasury securities. The fund’s dividend yield is 3.64%. It has just distributed the dividend on September 22, 2011 ($0.28). The annual expense ratio of this fund is 0.11%. This fund has been managed by Gregory Davis since its inception in November 2007. Davis is the principal of Vanguard and the head of Vanguard Bond Index Group. This is a no-load fund.
  • CUSIP: 921910881
  • Beta (3-year): 4.97
This top performer mutual fund uses Barclays US Treasury Strips 20-30 years equity as the fund’s benchmark. The fund invested 100% of the assets in Treasury/ Agency government bond.

3. ProFunds US Government Plus Investor (GVPIX)

To achieve its daily investment results, this ProFunds US Government Plus Investor fund invests in money market instruments and derivatives. This Profunds fund is managed by Todd Johnson. He has been with this fund since December 2008. The fund has 0.42% dividend yield. The annual expense ratio of this fund is 1.37% which is a bit higher compared to the average in Long Government category (0.84%).

The other class of this fund is Service Class (GVPSX). The CUSIP of this GVPIX is 74318A620 and the CUSIP of GVPSX is 74318A612. The fund invested 100% in U.S. Treasury.

4. Rydex Govt Long Bond 1.2x Strategy Investor (RYGBX)

The Rydex Govt Long Bond 1.2x Strategy Investor fund’s objective is to get returns that correspond to 120% of the price movement of the long Treasury Bond. This fund is currently managed by Ryan A. Harder. The annual expense ratio of this fund is 0.98%. The fund’s dividend yield is 2.52%. The last dividend is distributed in August 2011 ($0.03). Morningstar has given this top performer fund with 2-stars rating. This Rydex fund is considered as leveraged bond mutual fund.

The minimum initial investment to invest in this RYGBX fund is $2,500. There is no sales-load fee and no management fee for investing in this fund. The CUSIP of this RYGBX fund is 783554504. The other classes of this fund are Class A (RYABX), Class C (RYCGX) and Advisor Class (RYADX). The assets allocation of this Rydex fund is 90.31% in bond and 8.70% in cash.

5. Wasatch-Hoisington US Treasury (WHOSX)

This Wasatch-Hoisington US Treasury fund seeks to offer a rate of return that exceeds the rate of inflation over a business cycle by emphasizing on income and capital appreciation. The fund is managed by Van Robert Hoisington. He is the President and the CIO of the Texas Commerce Bank. The annual expense ratio of this WHOSX fund is 0.75%. The fund’s dividend yield is 2.94% and last distributed in June 2011 ($0.13).  To buy this mutual fund, investor will need a minimum of $2,000.

The benchmark of this fund is Barclays Capital U.S. Aggregate Bond Index. The fund has 14 total holdings as of June 2011. The average maturity of this Wasatch fund is 24.5 years with 19.4 years of effective duration. The 10-year beta is 3.23.

8. Vanguard Long-Term Treasury Investor (VTUSX)

The Vanguard Long-Term Treasury fund is seeking to provide a sustainable and high level of current income. The majority of its assets are invested in US Treasury securities. David R. Glocke is the current lead manager of this Vanguard fund. This fund has total net assets of $3.1 billion. The fund’s dividend yield is 3.24%. The annual expense ratio is 0.22%. Morningstar has rated this fund with 4-stars rating.

The minimum initial investment to start with this VUSTX fund is $3,000. This fund can be purchased from 82 brokerages. There is no management fee and no sales load fee to invest in this fund. The average maturity of this fund is 20.4 years and the average duration is 14.1 years. The average coupon is 4.6%. The fund uses Barclays US Long Treasury as its benchmark.

10. T. Rowe Price US Treasury Long-Term (PRULX)

The T. Rowe Price US Treasury Long-Term fund’s objective is to seek for the highest level of income consistent with maximum credit protection. The current fund’s manager is Brian J. Brennan. The fund was introduced to public in 1989. The annual expense ratio of this T. Rowe Price fund is 0.55%. The fund has 3.37% dividend yield. The last dividend was distributed in August 2011 ($0.03).

This fund requires $2,500 for the minimum initial investment in brokerage account. There is no 12b1 fee and no sales load fee. The asset allocation of this fund as of June 2011 is 99.7% in domestic bond and 0.3% in cash. The average maturity of this fund is 22.01 years and the average duration is 14.17 years.

Disclosure: No Position

Fund Information

NoNameTicker3 MonthRatingYieldExpense RatioLoadNet AssetsMin to Invest
1PIMCO Extended Duration InstlPEDIX43.45%23.20%0.50%0.00%$308 $ 1 mil
2Vanguard Extended Dur Treas Idx InstlVEDTX43.19%13.64%0.11%0.00%$549 $ 5 mil
3ProFunds US Government Plus InvGVPIX33.42%10.42%1.37%0.00%$31 $15,000
4Rydex Govt Long Bond 1.2x Strategy InvRYGBX31.84%22.52%0.98%0.00%$216 $2,500
5Wasatch-Hoisington US TreasuryWHOSX30.29%32.94%0.75%0.00%$172 $2,000
6American Century Zero Coupon 2025 InvBTTRX20.93%23.87%0.57%0.00%$180 $2,500
7Fidelity Spartan L/T Tr Bd Idx InvFLBIX20.74%33.48%0.10%0.00%$255 $10,000
8Vanguard Long-Term Treasury InvVUSTX20.57%43.24%0.22%0.00%$3,200 $3,000
9Vanguard Long-Term Govt Bond Idx InstlVLGIX20.28%N/A3.45%0.09%0.00%$96 $ 5 mil
10T. Rowe Price US Treasury Long-TermPRULX20.14%43.37%55.00%0.00%$347 $2,500


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