10 Best Diversified Bond Mutual Funds 2012

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Selecting diversified bond mutual funds are essential for investors. Diversified bond mutual funds provide regular income and reduce risks associated with stock and bond market. Some of the best diversified bond mutual funds are: Scout Core Plus Bond fund, AllianceBernstein High Income fund, PIMCO Investment Grade Corporate Bond fund, etc.

Intro

Having a diversified bond mutual fund in your investment portfolio is critical during any economic period. During the uncertainty time, bond fund may provide regular income (in term of yield) and less volatility. The bond mutual fund may also provide investors with a convenient option to hold a portfolio of bonds from different sectors such as government bond, corporate bond, mortgage backed bond, foreign entities bond, convertible, etc.

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Using a bond mutual fund, investor may also reduce the investment costs compare to create a portfolio of individual bonds. The investment risks of mutual fund investment are also lower than single bond investment.

Best Bond Mutual Funds

Most of these diversified bond mutual funds are also rated among the best mutual fund by various financial website such as Money, Morningstar, US News, etc. Please check details about its expense ratio, sales load, initial investment requirement, performance, risk, top holdings, turnover rate, etc.

Top 10 Diversified Bond Mutual Funds of 2012 are:
  1. Scout Core Plus Bond Y (SCPYX)
  2. AllianceBernstein High Income A (AGDAX)
  3. PIMCO Investment Grade Corp Bond A (PBDAX
  4. PACE Strategic Fixed Income A (PBNAX)
  5. JHancock2 Strategic Income Opportunities A (JIPAX)
  6. TCW Core Fixed-Income N (TGFNX)
  7. Loomis Sayles Core Plus Bond A (NEFRX
  8. Lord Abbett Income A (LAGVX)
  9. API Efficient Frontier Income A (APIUX)
  10. Scout Core Bond Y (SCCYX)
Updated on 2/29/2012

Scout Core Plus Bond fund
1. Scout Core Plus Bond Y (SCPYX)

The Scout Core Plus Bond fund’s objective is to seek a high level of total return consistent with capital preservation. This diversified bond mutual fund mainly utilizes its assets to buy investment bonds of varying maturities, including mortgage- and asset-backed securities. It may also invest in high yield securities.

Mark M Egan is the fund’s manager since 1996. Investor can start investing in this fund with $1,000 minimum initial investment. This best bond mutual fund is rated with 5 stars rating. It also has a yield of 2.83%. The annual expense ratio of this SCPYX fund is 0.78%.

This fixed income fund has a 5 years annualized return of 9.74%. The top 3 sectors in its holdings are Corporate Bond, Agency MBS CMO, and Asset-Backed.

AllianceBern High Income
2. AllianceBernstein High Income A (AGDAX)

The AllianceBernstein High Income fund invests in a broad range of fixed-income securities in both developed and emerging market countries. Its investments may include U.S. and non-U.S. corporate debt securities and government debt securities.

This multi-sector bond mutual fund has total net assets of $3.53 billion. The 12-month dividend yield is 7.06%. Morningstar gave this fund 5-star rating. This AGDAX fund has annual expense ratio of 1.15%.
As of January 2012, the top fixed income holdings are Republic of Venezuela (0.71%), Brazil Notas do Tesouro Nacional Series (0.65%), Argentina Bonos (0.57%), Republic of Brazil (0.57%) and Russian Agricultural Bank OJSX Via RSHB Capital SA (0.50%).

3. PIMCO Investment Grade Corp Bond A (PBDAX)

The investment objective of PIMCO Investment Grade Corporate Bond fund is to provide maximum total return consistent with capital preservation and prudent investment management. This PIMCO bond mutual fund invests most of assets (>80%) in a diversified portfolio of investment-grade corporate fixed-income securities of varying maturities.

This taxable bond mutual fund is currently managed by Mark Kiesel. This top bond fund has a 5-stars rating from Morningstar. Morningstar’s analysts have rated this fund with Silver rating. The total net assets of this fund are $6.96 billion. This PBDAX fund has 10-year annualized return of 7.79%.

Investors can open a brokerage account with initial purchase of $1.000. No IRA account is available. There are 87 brokerages that provide the sale of this fund. The 12b1 fee of this best mutual fund is 0.25%. The maximum sales charge is 3.75%.

4. PACE Strategic Fixed Income A (PBNAX)

The PACE Strategic Fixed Income mutual fund invests >80% of net assets in investment grade fixed income securities. The fund may invest in junk bond, forward currency contracts, options, futures, swaps and other derivatives.

This top ranked bond fund is offered under the UBS fund family. It has 4-stars rating from Morningstar. The current dividend yield is 3.67%. This fund has annual expense ratio of 1.06%.

This fund has always performed in positive return for these 11 years. The YTD return is 1.15%. The 3-year annualized return was 12.24% and 5-year annualized return was 9.09%.

5. JHancock2 Strategic Income Opportunities A (JIPAX)

JHancock2 Strategic Income Opps
The JHancock2 Strategic Income Opportunities fund seeks to maximize total return with current income and capital appreciation. This best ranked bond fund invests majority of assets (>80%) in foreign government bond, corporate debt securities from developed and emerging markets, U.S. government and agency securities, domestic high-yield bonds, and currency instruments. It may also invest in preferred stock, other bonds, and domestic or foreign stocks.

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The current fund manager of this bond mutual fund is Daniel S. Janis, III. The fund has total net assets of $2.66 billion. The annual expense ratio is 1.17%, quite similar to the average in the Multisector Bond category (1.11%).

Investors need a minimum investment of $2.500 to open a brokerage or retirement account in this fund. In 2010, this fund has returned 14.95%. The YTD return of this fund is 3.40%.

6. TCW Core Fixed-Income N

This TCW Core Fixed-Income fund invests in diversified portfolio of bond classes such as US government bond, corporate obligations (including convertible), mortgage-backed securities, asset backed securities, foreign corporate and government bond, and other debts.

The fund’s lead manager is Tad R. Rivelle since 2009. Morningstar has rated this bond mutual fund with 5 stars rating. The past 12 month dividend yield is 3.28%. The annual holdings turnover rate is 280%. It also has an expense ratio of 0.78%.

This TGFNX fund has returned 10.86% over the past 3 year, and 8.71% over the past 5 year. The total net assets of this bond fund are $687 million.

7. Loomis Sayles Core Plus Bond A (NEFRX)

The Loomis Sayles Core Plus Bond investment fund invests mainly in investment-grade securities. This top rated bond fund was first introduced to public in November 1973. Since its inception, it has achieved 33 years of positive return. It has 4-stars rating from Morningstar. The fund is offered in the Natixis Funds family. It has dividend yield of 2.31%.

This NEFRX fund can be purchased from 95 brokerages. The maximum sales charge is 4.50%. The average duration is 6.11 years and average maturity of 8.95 years.

8. Lord Abbett Income A (LAGVX)

Lord Abbett Income fund
The Lord Abbett Income mutual fund seeks a high level of income consistent with capital preservation. This Intermediate-Term Bond mutual fund has dividend yield of 5.41%. Andrew H. O’Brien is managing this fund now. The fund has total net assets of $1.40 billion. The annual expense ratio of this fund is 0.87%. The fund has 4-stars rating from Morningstar. The 3-year annualized return is 15.65%.

The other classes of this top bond mutual fund are Class C (LAUSX), Class F (LAUFX), Class I (LAUYX), Class R2 (LAUQX), and Class R3 (LAURX). As of January 2012, the portfolio breakdown is Investment Grade Corporate (57.5%), High Yield Corporate (21.9%), Currency (9.8%), ABS (7.7%) and MBS (7.5%).

9. API Efficient Frontier Income A (APIUX)

This API Efficient Frontier Income fund is currently managed by David Basten. He started managing this fund since its inception in July 1997. Morningstar gave this American Pension Investors fund a 3-star rating. The 12-month dividend yield is 6.99%.

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The other classes of this fund are Class C (AFFIX) and Class I (APIIX). The top holdings are SPDR Barclays Capital High Yield Bond (5.5%), iShares IBoxx High Yield Corporate Bond (5.0%), iShares IBoxx Investment Grade Corporate Bond (4.6%).

10. Scout Core Bond Y

The Scout Core Bond mutual fund uses its assets to purchase investment grade bonds of varying maturities. The overall portfolio has duration of between 2 and 7 years. The fund has an expense ratio fee of 0.80%. The other class of this bond fund is Class I (SCCIX). This bond mutual fund is also rated with 5 stars by Morningstar. The top bond holding is FNMA bond. The fund has a 3 year annualized return of 15.34%.

11. Delaware Diversified Income A (DPDFX)

This Delaware Diversified Income fund has a 3-year annualized return of 13.04% and a 10-year annualized return of 6.38%. Because of its good performance, it has 5-stars rating from Morningstar. The total net assets are $8.65 billion.

The current fund manager is Paul Grillo. This DPDFX fund has annual expense ratio of 0.92%. The maximum sales charge is 4.50%. The effective duration is 5.75 years.

Disclosure: No Position

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Fund Performance

NoNameTicker1 Year Return %3 Year Return %5 Year Return %10 Year Return %Expense Ratio
1Scout Core Plus Bond YSCPYX10.00%19.01%9.74%7.56%0.80%
2AllianceBern High Income AAGDAX4.64%24.67%9.68%13.13%0.89%
3PIMCO Investment Grade Corp Bd APBDAX8.93%13.26%9.37%7.79%0.90%
4PACE Strategic Fixed Income APBNAX10.29%12.24%9.09%6.88%1.06%
5JHancock2 Strategic Income Opps AJIPAX4.71%16.05%8.77%-1.19%
6TCW Core Fixed-Income NTGFNX7.17%10.86%8.71%6.96%0.78%
7Loomis Sayles Core Plus Bond ANEFRX9.39%12.68%8.62%6.59%0.87%
8Lord Abbett Income ALAGVX8.78%15.65%8.60%6.22%0.88%
9API Efficient Frontier Income AAPIUX0.63%18.94%8.47%5.12%2.44%
10Scout Core Bond YSCCYX8.61%15.34%8.46%6.35%0.80%
11Delaware Diversified Income ADPDFX7.36%13.04%8.37%8.30%0.93%

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