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Top Performer Taxable Bond Mutual Funds of 2010 Best: Convertible, Emerging Markets, Fixed Income

Updated on July 8, 2011
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Introduction

This article is all about the top performer taxable bond fund or fixed income fund of 2010. In my previous article, I’ve provided the top performer of domestic stocks and international stocks funds. The list can provide a new idea to invest in certain bond sectors for upcoming 2011 year and beyond. As we know, fixed income mutual fund primarily consists of taxable bonds and non taxable bonds (Municipal bonds) funds. I will also look into the various taxable bond sectors or categories such as Government bonds, inflation protection, bank loan, emerging market bonds, high yield bonds and more.

Mutual funds are an easy way of investing money on the bond market. These bond mutual funds let investors to pool their money collectively in a group investment fund, which is actively managed by an experienced fund manager.

The fund manager invests parts of the fund into specific debts or bonds, thereby doing all the necessary research and trading. The best thing in bond fund investment is most of these bond fund pay a fixed rate of interest income or distribution yield regularly.


Top Performer Fund Criteria

I always use the following four criteria when I filtered the best performing mutual funds. The four criteria of choosing best performing mutual fund for 2010 are:

1. The % Year to Date (YTD) return is the highest in its own class.

2. The fund total asset is more than 0.5 billion

3. It has Morningstar Rating of 3 stars or more

4. It is not part of leveraged or bear fund

Note: Some of these funds may have a sales load (Front End Sales Load or Deferred Sales Load). If you like, please try to find other classes which don’t have a sales load or max 12b1 fee. Some funds offered in retirement account such as IRA either Traditional IRA or Roth IRA and 401k don’t have any sales load and have lower expense ratio.

The following is the list of the taxable bond fund leader of 2010 in its respective category.

  • Long Term Government Bond: PIMCO Long-Term US Government A
  • Intermediate Government Bond: Fidelity Spartan Inter. Term Bond Idx
  • Short Term Government Bond: Victory Fund For Income A
  • Inflation Protected Bond: PIMCO Real Return A
  • Long Term Bond: Delaware Extended Duration Bond A
  • Intermediate Term Bond: USAA Intermediate-Term Bond
  • Short Term Bond: Virtus Multi-Sector S/T Bond A
  • Ultrashort Term Bond: Wells Fargo Advantage Ultra S/T Inc Inv
  • Multisector Bond: PIMCO Income A
  • High Yield: BlackRock High Yield Bond Inv A
  • World Bond / International Bond: Templeton Global Bond A
  • Emerging Market Bond: TCW Emerging Markets Income I
  • Bank Loan: Oppenheimer Senior Floating Rate A
  • Convertibles: Putnam Convertible Securities A


Top Performer Taxable Bond Mutual Funds of 2010

(click column header to sort results)
Fund Description  
Ticker  
Category  
Expense Ratio  
M* Rating  
YTD  
Min Invest  
Yield  
PIMCO Long-Term US Gov A
PFGAX
Long Government
0.88%
4
11.65%
$1,000
3.49%
Fidelity Spartan Interm Tr Bd Idx
FIBIX
Intermediate Gov
0.20%
4
7.54%
$10,000
2.96%
Victory Fund For Income A
IPFIX
Short Government
0.96%
5
6.55%
$2,500
5.69%
PIMCO Real Return A
PRTNX
Inflation Protected
0.90%
4
7.17%
$1,000
2.91%
Delaware Ext Duration Bond A
DEEAX
Long Term
0.94%
4
14.28%
$1,000
5.44%
USAA Intermediate-Term Bond
USIBX
Intermediate Term
0.65%
4
13.45%
$3,000
5.49%
Virtus Multi-Sector S/T Bd A
NARAX
Short Term
1.12%
4
10.25%
$500
1.12%
Wells Fargo Adv Ultra S/T Inc
STADX
Ultrashort Bond
0.74%
3
3.57%
$2,500
1.80%
PIMCO Income A
PONAX
Multisector
0.85%
5
19.34%
$1,000
6.05%
BlackRock High Yield Bond Inv A
BHYAX
High Yield
0.98%
4
17.96%
$1,000
7.33%
Templeton Global Bond A
TPINX
World Bond
0.91%
5
12.68%
$1,000
4.27%
TCW Emerging Markets Income I
TGEIX
Emerging Mkt Bond
1.17%
5
21.27%
$2,000
6.35%
Oppenheimer Senior Flrt Rate A
OOSAX
Bank Loan
1.13%
5
13.15%
$1,000
5.77%
Putnam Convertible Securities A
PCONX
Convertibles
1.20%
3
19.55%
$500
2.92%
Source

A. PIMCO Long-Term US Government A

PIMCO Long-Term US Government A Fund seeks maximum total return consistent with preservation of capital and prudent investment management. The fund invests most of its assets (>80%) in a diversified portfolio of U.S. government fixed-income securities. The fund lead manager is Stephen Rodosky since 2007. The total expense ratio is 0.88% per year. The fund has returned 6.65% over the past five years and 7.11% over the past decade. The fund also has a yield of 3.49%.

The fund average credit rating is rated AA (investment grade). The top 3 sectors in funds are Government related bond (US treasuries and US agency bond), mortgage bond and municipal bond. The average effective duration is 13.13 years.

B. Fidelity Spartan Intermediate Term Bond Index Inv

Fidelity Spartan Intermediate Term Bond Index fund seeks a high level of current income. The fund invests >80% of assets in securities which track the Barclays Capital U.S. 5-10 Year Treasury Bond index. The fund average maturity will be between three and 10 years. The fund lead manager is Curtis Hollingsworth since 2009.The total expense ratio is 0.20% per year and is low since it is a passively managed index fund. The fund has returned 7.36% over the past 3 years. The fund also has a yield of 2.96%.

The fund average credit rating is rated AAA (Top rated investment grade). The fund invests primarily in US government or US Treasuries (100%). The average effective duration is 6.50 years.

C. Victory Fund for Income A

Victory Fund for Income A fund investment objective is to achieve a high level of current income consistent with preservation of capital. The fund invests primarily in U.S. government securities issued. The fund also invests 65% of total assets in GNMA securities. The fund lead manager is Craig Ruch since 2005.The total expense ratio is 0.96% per year and is low since it is a passively managed index fund. The fund has returned 5.67% over the past 3 years and 5.48% over the past 5 years. The fund also has a yield of 5.69%.

The fund has the highest Morningstar rating with 5 stars. The fund average credit rating is rated AAA (Top rated investment grade). The top 3 sectors in funds are Mortgage Pass-Thru, US Treasuries, and Mortgage CMO. The average effective duration is 2.80 years.

D. PIMCO Real Return A

The PIMCO Real Return A fund objective is to achieve maximum real return. The fund usually invests most of net assets (>80%) in inflation-indexed bonds of varying maturities. It invests primarily in investment-grade securities, but may invest <10% of total assets in high-yield securities or junk bonds. The fund lead manager is Mihir Worah since 2007.The total expense ratio is 0.90% per year. The fund has returned 5.01% over the past 3 years and 6.98% over the past decade. The fund also has a yield of 2.91%.

The fund has the Morningstar rating with 4 stars. The fund average credit rating is rated A (investment grade). The top 5 sectors in funds are Treasury Inflation-Protected Securities (TIPS), US corporate bond, foreign corporate bond, Mortgage CMO and Asset-Backed bond. The average effective duration is 2.80 years.


E. Delaware Extended Duration Bond A

The Delaware Extended Duration Bond A fundinvestment seeks total return. The fund will invest majority of its asset (>80%) in investment grade corporate bond (BBB rated or better). It may also invest < 20% in junk bonds and <30% in foreign debt. The fund lead manager is Thomas H. Chow since 2007.The total expense ratio is 0.94% per year. The fund has returned 9.85% over the past 3 years and 8.08% over the past 5 years. The fund also has a yield of 5.44%.

The fund has the Morningstar rating with 4 stars. The fund average credit rating is rated BBB (lowest investment grade). The top 5 sectors in funds are US Corporate, Foreign Corporate, US Treasuries, Municipal, and mortgage pass-thru. The average effective duration is 11.96 years.

F. USAA Intermediate-Term Bond

USAA Intermediate-Term Bond fund seeks high current income without undue risk to its principal. The fund normally invests at least 80% of assets in a broad range of debt securities. It maintains a dollar-weighted average portfolio maturity between 3 to 10 years. The fund lead manager is R. Matthew Freund since 2000. The total expense ratio is 0.65% per year. The fund has returned 6.66% over the past 5 years and 6.29% over the past decade. The fund also has a yield of 5.49%. There is no sales load for this USAA Intermediate-Term Bond fund.

The fund has the Morningstar rating with 4 stars. The fund average credit rating is rated BBB (lowest investment grade). The top 5 sectors in funds are US Corporate, Mortgage CMO, Asset Backed, Foreign Corporate, and TIPS. The average effective duration is 4.18 years.

G. Virtus Multi-Sector S/T Bond A

Virtus Multi-Sector S/T Bond Afund investment is seeking to provide high income by investing most of its asset in short term fixed income securities. The fund usually invests in 12 bond market sectors as diversified portfolio. The fund lead manager is David L. Albrycht since 1993.The total expense ratio is 1.12% per year. The fund has returned 5.48% over the past 5 years and 5.92% over the past decade. The fund also has a yield of 1.12%.

The fund has the Morningstar rating with 5 stars (highest rated fund). The fund average credit rating is rated BBB. The top 5 sectors in funds are Mortgage CMO, US Corporate, Asset Backed Bond, Foreign Corporate, and Foreign government bond. The average effective duration is 2.70 years.

H. Wells Fargo Advantage Ultra S/T Income Inv

Wells Fargo Advantage Ultra S/T Income Inv seeks current income with capital preservation. The fund invests most of its net assets in income-producing debt securities. The fund investment portfolio may invest <25% of total assets in foreign debts and <25% of total assets in below investment-grade debt securities. The fund lead manager is Thomas Price since 2002. The total expense ratio is 0.74% per year. The fund also has a yield of 1.80%.


I. PIMCO Income A

PIMCO Income A fund investment seeks to maximize current income with long-term capital appreciation as secondary objective. The PIMCO Income fund invests >65% of total assets in a multi-sector portfolio of fixed-income instruments of varying maturities. The fund may invest < 50% of total assets in high-yield securities rated below investment-grade. The fund lead manager is Daniel J. Ivascyn since 2007.The total expense ratio is 0.85% per year. The fund also has a yield of 6.05%.

J. BlackRock High Yield Bond Inv A

BlackRock High Yield Bond Inv A fundseeks total return with consistent income generation and prudent investment management. The fund invests primarily in non-investment grade bonds with 10 years or less maturities. It invests majority of assets (>80%) in high-yield bonds, including convertible and preferred securities. It may also invest a small part of its asset in foreign debt securities. The fund lead manager is James S. Keenan since 2007.The total expense ratio is 0.98% per year. The fund also has a yield of 7.33%.

The fund has the Morningstar rating with 4 stars. The fund average credit rating is rated B (non investment grade). The top 3 sectors in funds are US corporate bond, foreign corporation bond, and convertible. The average effective duration is 1.80 years.


Templeton Global Bond Overview
Templeton Global Bond Overview

K. World Bond / International Bond: Templeton Global Bond A

The Templeton Global Bond Afund objective is to provide current income with capital appreciation and growth of income. The fund normally invests at >80% of net assets in bonds, including debt securities of any maturity, such as bonds, notes, bills and debentures. It may invest < 25% of total assets in bonds that are rated below investment grade and some of its asset in emerging market bond. The fund lead manager is Michael Hasenstab since 2001. The total expense ratio is 0.98% per year. The fund also has a yield of 4.27%.

The fund has the Morningstar rating with 5 stars. The fund average credit rating is rated BBB (investment grade). The fund regional breakdown is as follows: Asia (40.71%), Europe/Africa (33.77%), and Americas (14.53%). The average effective duration is 2.78 years.

L. Emerging Market Bond: TCW Emerging Markets Income I

TCW Emerging Markets Income Ifund seeks high total return from current income and capital appreciation. The fund invests majority of assets (>80%) in debt securities issued or guaranteed by companies, financial institutions and government entities in emerging market countries. The debt securities in which the fund invests may consist of securities that are unrated or rated BB or lower. The fund lead manager is David Robbins since 2009. The total expense ratio is 1.17% per year. The fund also has a yield of 6.35%.

The fund has the Morningstar rating with 5 stars. The fund average credit rating is rated BB (non investment grade). The top 10 countries in this fund include Brazil, Argentina, Russia, Mexico, Ukraine, Korea, Indonesia, Peru, Venezuela, United Arab Emirates and Turkey. The top corporate sectors are as follows: Banking, Mining, Transportation, oil & gas, finance company and materials. The average effective duration is 5.47 years.

M. Bank Loan: Oppenheimer Senior Floating Rate A

Oppenheimer Senior Floating Rate A fund invests mainly in floating rates that hold a senior position in the capital structure of U.S. and foreign corporations, partnerships or other business entities. It invests most of its net assets in Senior Loans. The fund lead manager is Joseph Welsh since 1999. The total expense ratio is 1.13% per year. The fund also has a yield of 5.77%.

N. Convertibles: Putnam Convertible Securities A

Putnam Convertible Securities A fund seeks current income and capital appreciation with conservation of capital as secondary objective. The fund normally invests >80% of assets in convertible securities. It typically invests a significant portion of assets in convertibles that are rated below investment-grade, as well as in investment-grade convertible securities. The fund lead manager is Robert L. Salvin since 2005.The total expense ratio is 1.20% per year. The fund also has a yield of 2.92%.


Disclosure: I have no affiliation with any of these funds. I also have no position in any of these funds currently. Please do your own research for additional details. Please trade and invest responsibly. Past Performance is No Guarantee of Future Results.

Note: You may need a brokerage to buy these mutual funds such as Fidelity ,Vanguard, Etrade,Firstrade, Scottrade, Schwab, TD Ameritrade and more.


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    • chan0512 profile imageAUTHOR

      chan0512 

      7 years ago from Camarillo, CA

      As always, thank you for your kind words. As always welcome your comment. More to come about mutual funds and investing idea. Thanks again for stopping by.

    • LillyGrillzit profile image

      Lori J Latimer 

      7 years ago from The River Valley, Arkansas

      As usual, excellent information laid out in a format, simple enough an eighth grader could comprehend! That is a compliment! Thank you for explaining something so mind-boggling (to me), in a reasonable and straightforward manner! :0) Thanks

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