Best Ultrashort Bond Mutual Funds 2013

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Discover best ultrashort bond mutual funds 2013. These top bond funds are selected based on several criteria such as fees, management, performance, income, and potential appreciation.

Top Bond Mutual Funds

Ultrashort bond mutual funds invests mainly in high quality U.S. fixed incomes or debts with less than 1 year duration. The investment includes investment grade corporate or government ultrashort bonds. It doesn’t invest in international, convertible, multisector, and high yield bond securities. These bond funds are less sensitive to interest rate hike. It also has low risk and low total return potential.

As described, these best ultrashort bond mutual funds 2013 are selected based on its low fees, management, interest income, and growth opportunities. You can choose these best mutual funds for your brokerage account or retirement account including 401k, traditional IRA, or Roth IRA. Some are available to invest for as little as $1,000.

The 10 best ultrashort bond mutual funds 2013 are:
    Best Ultrashort Bond Mutual Funds 2013
  1. Metropolitan West Ultra Short Bond Fund (MWUSX)
  2. TCW Short Term Bond Fund (TGSMX)
  3. PIMCO Short-Term Fund (PSHAX)
  4. William Blair Low Duration Fund (WBLNX)
  5. Calvert Ultra-Short Income Fund (CULAX)
  6. Western Asset Adjustable Rate Income Fund (ARMZX)
  7. Federated Ultrashort Bond Fund (FULAX)
  8. PIA Short Term Securities Fund (PIASX)
  9. Managers Short Duration Government Fund (MGSDX)
  10. Wells Fargo Advantage Adjusted Rate Government Fund (ESAAX)
Updated on July 5, 2013

Metropolitan West Ultra Short Bond Fund Metropolitan West Ultra Short Bond Fund (MWUSX)

Metropolitan West Ultra Short Bond Fund is managed by Stephen M. Kane, Mitchell A. Flack, Laird R. Landmann and Tad Rivelle. It utilizes its assets to purchase investment grade fixed income securities or unrated securities with similar quality. The total net assets are $151.3 million. This fixed income fund also has a low expense ratio of 0.50%.

Ranked with 4-stars rating by Morningstar, this bond fund has YTD return of 0.33% as of June 24, 2013. The fund’s benchmark is BofA Merrill Lynch 1-year UST Index. The Institutional class of this fund (MWUIX) has 0.35% annual expense ratio. Since its inception, this best ultrashort bond mutual fund has only one year of negative return in 2008. Based on the load adjusted returns, it has returned
4.55% over the past 1-year and 1.23% over the past 5-year.

This mutual fund has average duration of 0.76 years and average maturity of 2.75 years. The top 3 sectors are Mortgage-Backed (49.5%), Cash & Equivalents (17.4%) and Commercial MBS (12.9%).

TCW Short Term Bond Fund (TGSMX)

This TCW Short Term Bond Fund was first introduced to public in February 1993. The fund managers are the same as previous fund, Metropolitan West Ultra Short Bond Fund. It invests mainly in diversified portfolio of debt securities of varying maturities, including bonds, notes and other similar fixed income instruments issued by governmental or private sector issuers. The fund’s CUSIP is 87234N-856. Its expense ratio rate is 0.44%. It also has dividend yield of 1.09%. The 30-day SEC Yield is 1.03%.

As one of the best ultrashort bond mutual funds, it has its best return in 2010 with 8.43%. The worst 1 year total return was occurred in 2008 with -4.35%. Based on the load adjusted returns, this taxable bond fund has returned 3.07% over the past 3-year and 2.50% over the past 10-year. It has 3-year beta risk of 0.12.

The top sectors of this fund are Mortgage-Backed (29.53%), Cash & Equivalents (29.34%), Corporate/ Credits (14.76%) and U.S. Government (14.66%).

PIMCO Short-Term Fund (PSHAX)

PIMCO Short-Term FundThe PIMCO Short-Term Fund is a popular bond mutual fund. It has $12.1 billion of total net assets. The fund manager is Jerome M. Schneider. The minimum initial investment for brokerage account is $1,000. There is a 12b1 fee of 0.25% and a front-end sales load fee of 2.25%. The annual holdings turnover as of June 18, 2013 is 307%. Investors of this fund get a dividend yield of 0.81%. Last May 2013, it provided $0.01 of interest income to investors.

Morningstar analysts rank this best ultrashort bond mutual fund with 3-stars and Gold rating. The fund has -0.20% of YTD return as of June 24, 2013. The one year it performed negatively since inception in 1997, was in 2008 with -1.65%. Based on the load adjusted returns, the fund’s performance is as below:
  • 1-year: -0.08%
  • 3-year: 0.74%
  • 5-year: 1.76%
  • 10-year: 2.31%
As of March 2013, the top 4 sector diversifications are Investment Grade Credit (37%), Mortgage (17%), Government-Agency (17%) and other (16%).

William Blair Low Duration Fund (WBLNX)

This William Blair Low Duration fund has annual expense ratio of 0.70%. Its investment objective is to maximize total return. The Institutional Shares of this fund (WBLIX) has annual expense ratio of 0.57%. The CUSIP is 969251701. It also has total net assets of $293.3 million. The 12-month trailing dividend yield is 2.58%. Christopher Vincent and Paul J. Sularz are the current fund managers.

As part of best ultrashort bond mutual funds, it has 4-stars rating from Morningstar. The benchmark is Merrill Lynch 1-Year US Treasury Note Index. The annual performance of this WBLNX fund since the inception is as below:
  • Year 2012: 2.82%
  • Year 2011: 1.75%
  • Year 2010: 1.88%
This taxable bond mutual fund has a total of 255 holdings as of May 2013. The total top 10 holdings represent 23.8% of the total portfolio. The top sector diversification is U.S. Agency Mortgage-Backed Pass Through (72.9%).

Calvert Ultra-Short Income Fund (CULAX)

Calvert Ultra-Short Income FundMorningstar analysts rank this Calvert Ultra-Short Income Fund with 4-star rating. It also has $499.9 million of total net assets. The expense ratio is 0.89% per year. The fund has effective duration of 0.32 years. The average maturity is 1.48 years. Lead by Vishal Khanduja, the fund is also managed by two Co-portfolio managers, Matthew Duch and Mauricio Agudelo.

The fund has always returned in positive returns so far, with the highest returns was achieved in 2009 with 7.29%. The lowest total return was occurred in 2011 with 0.20%. This top fund has YTD return of 0.37% as of June 24, 2013.

As of May 2013, the top 5 bonds in its holdings are Qwest Corp (2.03%), Morgan Stanley (2.0%), Citigroup Inc (1.73%), Codelco Inc (1.73%) and General Electric Cap Corp (1.57%).

Bond Fund Information


NoFund DescriptionFund CodeRatingExpense RatioNet Assets (mil) Min Invest
1Metropolitan West Ultra Short Bond FundMWUSX40.50%$151 $5,000
2TCW Short Term Bond FundTGSMX40.44%$18 $2,000
3PIMCO Short-Term Fund PSHAX40.70%$12,100 $1,000
4William Blair Low Duration Fund WBLNX40.70%$293 $2,500
5Calvert Ultra-Short Income Fund CULAX40.89%$500 $2,000
6Western Asset Adjustable Rate Income Fund ARMZX30.91%$207 $1,000
7Federated Ultrashort Bond Fund FULAX30.90%$2,300 $1,500
8PIA Short Term Securities Fund PIASX30.35%$136 $1,000
9Managers Short Duration Government Fund MGSDX40.81%$2,000 $2,000
10Wells Fargo Advantage Adj Rate Govt Fund ESAAX40.74%$1,500 $1,000

Top Fund Performance

NoFund DescriptionYTD Return (%)1-Year Return %3-Year Return %5-Year Return %10-Year Return %
1Metropolitan West Ultra Short Bond Fund0.33%3.94%3.83%2.22%N/A
2TCW Short Term Bond Fund0.15%1.21%1.84%2.32%2.46%
3PIMCO Short-Term Fund -0.20%1.32%1.30%2.11%2.41%
4William Blair Low Duration Fund -1.11%0.24%1.29%N/AN/A
5Calvert Ultra-Short Income Fund 0.37%1.62%1.51%2.65%N/A
6Western Asset Adjustable Rate Income Fund 0.97%3.66%3.07%2.23%1.82%
7Federated Ultrashort Bond Fund -0.26%1.02%1.38%2.18%2.07%
8PIA Short Term Securities Fund -0.20%0.02%0.36%1.14%2.15%
9Managers Short Duration Government Fund -0.28%0.46%0.98%1.61%2.42%
10Wells Fargo Advantage Adj Rate Govt Fund 0.14%0.89%1.57%2.16%2.50%

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